Technical article
What the Trustee Will Ask You to Prove About Where Your Money Came from
The same firm says the trustee weighs the written story about as much as the documents.
Picture a widower in Arizona who built a business over many years, sold it, and now wants to put part of the proceeds in a family trust. He expects to sign a deed. He does not expect the trustee to ask him how he came to own the money.
The trustee asks. It checks everyone who controls the trust. That means the person who creates it, the protector, and sometimes the first beneficiaries.
Here is what the sources say a Cook Islands trustee looks for, and what South Dakota's banking regulator expects.
| Item | What the sources say |
|---|---|
| Address proof | An original statement dated within 3 months, showing a home address |
| Source of wealth | A written account of how the wealth was built, backed by tax returns and statements |
| Statement of solvency | A signed statement that you can pay your debts; hidden lawsuits can lead to refusal |
| Financial statements | Dated within the last 90 days (one South Dakota trustee's guide, 2014) |
| Reason for the trust | Recorded in writing (South Dakota regulator, medium and high risk) |
| Proof of tax compliance | In another country; a sworn statement may do (South Dakota regulator) |
The address check causes more delay than anything else, according to one law firm. The same firm says the trustee weighs the written story about as much as the documents.
It gives an example of what is enough. A medical practice run for 25 years, backed by tax returns and statements, is enough. A statement showing US$3 million at a brokerage, with no history behind it, is not. Extra scrutiny and longer timelines apply to politically exposed persons (people in public roles), to people with lawsuits, and to ownership spread over several layers that has to be traced back to the person.
South Dakota's banking regulator is an official source, tier A. Its 2022 guidance expects a trust company to document the purpose, the identity of the people involved and the source of funds before it accepts a foreign trust. It expects most such trusts to be rated medium or high risk. Those two ratings need an independent background investigation. Someone who holds control as a grantor or protector counts as an owner of the trust. The regulator expects the review to be repeated: yearly for high risk, every two years for medium, every three years for low.
The time estimates come from the trustees' own advice, tier C. A complete package of papers saves 2 to 4 weeks, and each round of follow-up questions adds 1 to 2 weeks.
You might say: "I have never been asked to prove this to my own bank. Why would a trust company ask more?" It is a fair question. A bank account holds your money. A trust passes it to other people, and the trustee takes it on. The checks apply to everyone who controls the trust, so they are not aimed at you alone.
You could gather the papers before the first call: tax returns over the years the wealth was built, current statements, a recent statement with your home address, and a few paragraphs telling the story in your own words. You could also ask a trustee which items it wants originals of.
This touches family as well. The trustee's checks can reach the first beneficiaries, who are often children.
How would you tell the story of how your wealth was built, in a few paragraphs? Share what you would put in it. Someone starting to write theirs may find it useful.
Figures are estimates for planning, based on public data. Date read: October 2026.
Sources
- Alper Law, Cook Islands know-your-customer page (C)
- South Dakota Division of Banking, foreign trust acceptance and oversight guidance, July 2022 (A)
- Trident Trust South Dakota quick guide, 2014 (C)
Tell us in the comments