Navigating the Corporate Transparency and New York LLC Transparency Acts: A Guide for Trust and Estates Attorneys
"One of the most significant challenges for trust and estate practitioners is balancing the privacy interests of their clients with the need to comply with CTA reporting requirements," write Deirdre R. Wheatley-Liss and Maria F. Galante.
October 21, 2024 at 12:00 PM
7 minute read
Trusts and Estates
The implementation of the Corporate Transparency Act (CTA) and the New York LLC Transparency Act (NYLTA) introduces new reporting obligations that have significant implications for trusts and estates that hold ownership interests in corporations, limited liability companies (LLCs), or limited partnerships. Failure to comply with these reporting requirements can result in substantial penalties, including fines of $500 per day and potential criminal prosecution (under the CTA).
Trusts and estate plans created prior to the enactment of the CTA may not address the need for trustees and beneficiaries to provide sensitive personal information to the management of entities in which they hold an interest. As such, estate administration checklists must be updated to include CTA reporting obligations, and newly drafted trust and estate plans should consider these requirements when drafting and selecting individuals for fiduciary roles.
|The Corporate Transparency Act
The CTA, enacted on Jan. 1, 2021, as part of the Anti-Money Laundering Act of 2020 (AML Act), aims to enhance transparency in the financial system and combat illicit activities, such as money laundering and terrorism financing. The act requires entities operating in the United States—such as corporations, LLCs, and other similar entities—to report beneficial ownership information (BOI) to the Financial Crimes Enforcement Network (FinCEN) (See https://www.fincen.gov/boi). This represents a significant shift from the previous U.S. practice, where the creation of entities could be done almost anonymously.
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View All
Falling Back in Love With Certain Estate Planning Strategies in a Falling Interest Rate Environment
9 minute read
Rupert Murdoch Trust Trial Underscores Lucrative Nature of High-End Private Client Practices
Trending Stories
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250
