Topic: Corporate Transparency Act (CTA)
The CTA establishes uniform beneficial ownership information reporting requirements for certain types of corporations, limited liability companies, and other similar entities created in or registered to do business in the United States. The CTA authorizes FinCEN to collect that information and disclose it to authorized government authorities and financial institutions, subject to effective safeguards and controls. The CTA and its implementing regulations will provide essential information to law enforcement, national security agencies, and others to help prevent criminals, terrorists, proliferators, and corrupt oligarchs from hiding illicit money or other property in the United States. The CTA is part of the Anti-Money Laundering Act of 2020 (AML Act).
The significance for estate planners is generally in the context of family businesses and family trusts. Business entities are often utilized to affect transfer tax efficiencies and to meet the goals and objectives of their clients. Planners will now need to consider the requirements of the CTA. Closely held companies, as well as newly established partnerships and limited liability companies are often used for wealth transition. Many of these business entities could fall within the reach of the CTA rules and regulations. Even though non-statutory trusts are generally not required to file with the State Department of Assessments and Taxation, and therefore may not fall within the context of the CTA rules, it is common for such trusts to own interests in one or more limited partnerships or limited liability companies as a way for a grantor to meet his or her planning objectives in transferring assets, or the value of assets, to family members, avoiding the probate process or protecting those assets from the creditors of their heirs or legatees. If you are considering ideas such as the above, then this topic will be important to your practice.
Kevin L. Shepherd, Esq.
Kevin Shepherd is a partner in the Real Estate Practice Group and Chair of the Finance Committee and Managing Director—Finance at Venable LLP in Baltimore, Maryland. Kevin is one of the country’s leading authorities on anti-money laundering and counter-terrorist financing issues as they affect the U.S. legal profession, and he has written extensively on these issues and has testified before the U.S. Senate on proposed beneficial ownership legislation. Kevin is the ABA Treasurer (2020-2023), and he is a former chair of the ABA Task Force on Gatekeeper Regulation and the Profession. Kevin is currently serving a 3 year term as the ABA’s representative to U.S. Treasury and the Paris-based Financial Action Task Force. Kevin is a former chair of the ABA Section of Real Property, Trust and Estate Law and a past president of the American College of Real Estate Lawyers.
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$50 Non-MSBA Members
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