Monthly Update for Administration of Trusts and Asset Management

December, 2024



 

UPDATE ON THE CORPORATE TRANSPARENCY ACT 

UPDATE

Let’s cut to the chase! A recent federal court order has blocked enforcement of the Corporate Transparency Act (the “Act”) and delayed the year-end deadline.  The injunction came about because of a lawsuit filed in the District Court for the Eastern District of Texas claiming the Act was unconstitutional.  While the Act could play a vital role in protecting the United States and international financial systems, some view the reporting requirements as a hardship and unconstitutional. 


NOW LET’S BACK UP - WHAT IS IT? 

As many of you know, the Corporate Transparency Act, commonly referred to as the new “FinCEN Law”, is a new federal law that became effective January 1, 2024. 


WHAT IS THE ACT’S PURPOSE?

The purpose of the Act is to make it harder for people engaging in criminal activities by using “shell” companies to hide their criminal activities, such as money laundering, terrorist financing, and drug trafficking, from law enforcement agencies.   


EXEMPTIONS

Certain companies are exempt and do not have to file any reports with FinCEN.  The exemptions include, but are not limited to, banks, credit unions, tax exempt entities such as charities, and entities that are licensed to sell securities. 

WHO IS REQUIRED TO FILE?

Except for the exempt companies as listed above, every type of entity that is filed with the office of the Secretary of State, such as corporations, limited liability companies, limited partnerships, professional corporations, and professional limited liability companies, are required to file reports with the Financial Crimes Enforcement Network (“FinCEN”) providing beneficial ownership information for any owner with a 25% or greater ownership interest and any persons who have substantial control of the day-to-day operations of the business.  The required information includes name, date of birth, address, identifying number on a driver’s license, passport or other government-issued ID, and social security number.

Stay tuned for further information to come.  Once the administration in Washington has changed hands, there will likely be a permanent decision made regarding the Act. 

If you have any questions regarding this topic or any other estate planning matters or investment matters, please feel free to contact us.

WealthTrust Oklahoma is the Oklahoma Trust representative office of National Advisors Trust Company. We are independent and hold a federal charter.  In addition to trust administration services, we offer investment management services through our firm, WTO Advisors.

Alyssa Kaiser, CTFA, has over 31 years of experience in the trust, investment, and banking industries and is President of WealthTrust Oklahoma and WTO Advisors.  Alyssa may be contacted at: (405) 241-1600, or by email at Alyssa@WealthTrustOk.com.