A law was introduced by (then) Senator Barak Obama and it is known as the Incorporation Transparency and Law Enforcement Assistance Act.
The purpose of this law is to help law enforcement stop the misuse of U.S. corporations. How will it do this? By requiring states to gather and report (to the Feds) information on the beneficial owners of all domestic entities.
What is a “domestic entity?” At this writing it appears that only corporations and limited liability companies are the target. While most states now require disclosure of the “owners” of these types of entities it is unclear how far the feds (via the states as their surrogate) will take this. For example, what if the Member of an LLC is the Trustee of a Personal Property Trust? Will the feds require disclosure of the beneficiary of the Trust? We think not. Trusts have been privacy tools for all citizens (including politicians) for over 100 years in our country.
It is our opinion that Land Trusts will not be affected by this new law. Once again, our advice to put each of your properties into separate Land Trusts will hold true. Then, make the beneficiary of your Land Trust your corporation, LLC or personal property trust. If this new proposed law is passed, and your entity is affected…just use nominees for “beneficial owners” and you will remain anonymous!
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