Corporate Transparency Act Update: What It Means for Estate Planning

Who is Subject to the Corporate Transparency Act?

As of January 1, 2024, the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) required certain private companies to report information regarding their beneficial owners and individuals who exercise substantial control and decision-making power. “Beneficial owners” are those who own at least twenty-five percent (25%) of an ownership interest.

The Corporate Transparency Act’s Impact on Estate Planning

Over the past year, what seemed like solely a corporate law clashed with estate planning and trusts and estates law. For those with business ownership interests (i.e. LLCs, S Corps, etc.), the reporting responsibility became increasingly unclear in the way it might apply to trust beneficiaries and other individuals who receive a financial advantage from a business entity that is owned by a trust.

Changes to the Corporate Transparency Act in 2025

After legal battles in federal court over the validity of the CTA and evolving directions from FinCEN, the who and when of the CTA has taken many turns. On February 27, 2025, FinCEN issued a statement that it will not issue any penalties or take any enforcement actions against companies based on the failure to file or update beneficial ownership information reports.

Further, as of March 2, 2025, the U.S. Department of Treasury announced that domestic companies and U.S. citizens are no longer obligated to comply with the CTA. The purpose behind this change is to minimize restrictive regulations which particularly affect small business owners. The Treasury Department stated it will not enforce any penalties or fines associated with the CTA reporting rules against U.S. citizens or domestic reporting companies or their beneficial owners. For non-citizens, those to whom the law still applies, they must report by March 21, 2025.

Looking Ahead: What’s Next for the CTA?

The recent developments in the law should come as a relief to U.S. citizens and domestic companies. However, it seems the Treasury Department still has some ironing out to do as it attempts to figure out how to stabilize enforcement and interpretation of the law. While some uncertainty still lingers as FinCEN attempts to create a more solid regulatory framework, hopefully March does not bring any more surprises.