Below is the latest update from FinCEN. However, this controversy is likely to continue as this matter winds its way through the appellate court process. We will continue to keep you updated. – Charles

FinCEN Extends Beneficial Ownership Information Reporting Deadline by 30 Days; Announces Intention to Revise Reporting Rule

FinCEN Notice: 2/18/2025

WASHINGTON, D.C. –– With the February 18, 2025, decision by the U.S. District Court for the Eastern District of Texas in Smith, et al. v. U.S. Department of the Treasury, et al., 6:24-cv-00336(E.D. Tex.), beneficial ownership information (BOI) reporting requirements under the Corporate Transparency Act (CTA) are once again back in effect. However, because the Department of the Treasury (Treasury) recognizes that reporting companies may need additional time to comply with their BOI reporting obligations, FinCEN is generally extending the deadline 30 calendar days from February 19, 2025, for most companies.

Notably, in keeping with Treasury’s commitment to reducing regulatory burden on businesses, during this 30-day period FinCEN will assess its options to further modify deadlines, while prioritizing reporting for those entities that pose the most significant national security risks. FinCEN also intends to initiate a process this year to revise the BOI reporting rule to reduce burden for lower-risk entities, including many U.S. small businesses.

Updated Deadlines

• For the vast majority of reporting companies, the new deadline to file an initial, updated, and/or corrected BOI report is now March 21, 2025. FinCEN will provide an update before then of any further modification of this deadline, recognizing that reporting companies may need additional time to comply with their BOI reporting obligations once this update is provided.

• Reporting companies that were previously given a reporting deadline later than the March 21, 2025 deadline must file their initial BOI report by that later deadline. For example, if a company’s reporting deadline is in April 2025 because it qualifies for certain disaster relief extensions, it should follow the April deadline, not the March deadline.

• As indicated in the alert titled “Notice Regarding National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.)”, Plaintiffs in National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.)—namely, Isaac Winkles, reporting companies for which Isaac Winkles is the beneficial owner or applicant, the National Small Business Association, and members of the National Small Business Association (as of March 1, 2024)—are not currently required to report their beneficial ownership information to FinCEN at this time.

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In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.

Please contact McClenaghan Law Group at 614-429-1053 with any questions.

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In light of a December 23, 2024, federal Court of Appeals decision, reporting companies, except as indicated below, are once again required to file beneficial ownership information with FinCEN. However, FinCEN has extended the reporting deadline as follows:

• Reporting companies that were created or registered prior to January 1, 2024 have until January 13, 2025 to file their initial beneficial ownership information reports with FinCEN. (These companies would otherwise have been required to report by January 1, 2025.)
• Reporting companies created or registered in the United States on or after September 4, 2024 that had a filing deadline between December 3, 2024 and December 23, 2024 have until January 13, 2025 to file their initial beneficial ownership information reports with FinCEN.
• Reporting companies created or registered in the United States on or after December 3, 2024 and on or before December 23, 2024 have an additional 21 days from their original filing deadline to file their initial beneficial ownership information reports with FinCEN.
• Reporting companies that qualify for disaster relief may have extended deadlines that fall beyond January 13, 2025. These companies should abide by whichever deadline falls later.
• Reporting companies that are created or registered in the United States on or after January 1, 2025 have 30 days to file their initial beneficial ownership information reports with FinCEN after receiving actual or public notice that their creation or registration is effective.

Please contact our office at 614-429-1053 with any questions.

Note: Our office is closed December 24, 2024 at 12pm until January 2, 2025.

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Understanding the basics of what each role entails and what to consider when making your choices can help ensure that your estate plan is effective.

Trustee

A revocable living trust is often the center of a well-designed estate plan because it is the best strategy for achieving most people’s goals. You (as the trust maker) will usually serve as the initial trustee and continue to manage the trust’s accounts and property in the same manner that you did before the trust was created. You will appoint a successor (backup) trustee in the trust agreement to be responsible for ensuring that your wealth is managed in accordance with your wishes after your death or during your incapacity. Your successor trustee will control only the accounts and property owned by the trust. It is best to have a trusted person or financial institution carry out this vitally important role.

Powers of Attorney

Powers of attorney are the documents in your estate plan that appoint individuals to make decisions on your behalf if you are alive but unable to do so yourself. There are a few different types of powers of attorney, each with their own specific areas of responsibility. Here are two common types to include in your estate plan:

• Financial Powers of Attorney

Financial powers of attorney grant the fiduciary you select the ability to take financial actions on your behalf, such as withdrawing money from your bank accounts to cover your expenses. A fiduciary who acts under the authority given in a financial power of attorney is generally called an agent. Your agent is only able to manage the accounts and property that are not owned by your trust. If an account or property is owned by the trust, it is the responsibility of the trustee to manage that item. You can name an individual as your agent or, in some circumstances, you can name an institution, like a trust company.

• Healthcare Powers of Attorney and Related Documents

A healthcare power of attorney allows you to name a trusted person to make or communicate your medical decisions on your behalf when you cannot do so yourself. These decisions may range from deciding what surgeon to use to whether to remove you from life support. Other documents can be used in conjunction with the healthcare power of attorney to cover specific actions that can be taken regarding your medical needs, such as making decisions about the types of care you wish to receive or who can access your medical information.

Executor

Your executor is the person who will see your accounts and property through probate, if necessary, and carry out your wishes based on your last will and testament if you have one. Depending on your preferences, your executor may be the same person or institution as your successor trustee.

Being an executor can be hard work and may have court-dictated deadlines; it is crucial to pick someone you know will be up to the job. They will probably need to hire an accountant to help sort out your taxes and a lawyer to assist in the process.

Get in Touch with Us Today

Let us help you make the process of picking your trustee, agents under powers of attorney, and executor as smooth and headache-free as possible. Once you have these choices in place, you will be able to rest easy knowing that your estate plan is in good hands no matter what life brings. Call us to make an appointment today.

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You may be required to file a Beneficial Ownership Information Report (BOIR) with the Financial Crimes Enforcement Network (FinCEN) if your company:

1. Is a corporation, limited liability company, or other entity created or registered to do business by the filing of a document with a secretary of state or any similar office in the United States
2. Does not meet one of the exemptions listed in FinCEN’s Small Entity Compliance Guide https://www.fincen.gov/sites/default/files/shared/BOI_Small_Compliance_Guide_FINAL_Sept_508C.pdf
3. Is a foreign company registered with the secretary of state or similar office under state law to do business in the United States.

Note: Sole proprietorships, trusts, and general partnerships do not typically require the filing of a formal document with the secretary of state, so they generally are not considered a reporting company and will not have a filing requirement.

Compliance Analysis: Who and What Gets Reported and When?

Under the CTA, information about the reporting company, certain beneficial owners and company applicant is e-filed with the Financial Crimes Enforcement Network (FinCEN).

• “Reporting companies” are generally private, for-profit businesses with less than $5 million in revenue, less than 20 full-time employees and not otherwise already subject to oversight by a federal agency (e.g. financial institutions, public utilities and SEC-registered entities are exempt). Unless a company is one of the 23 specific exemptions, it must report.
• “Beneficial owners” are generally those who hold at least 25% ownership in a reporting company or otherwise exercise “substantial control” of the reporting company. When communicating beneficial ownership rules to clients, my firm adopts the more specific term “reported persons” to signal that not all beneficial owners are required to report to FinCEN (i.e. those with less than a 25% ownership stake) and that persons who exercise substantial control may be required to report even if they have no ownership interest (e.g. a non-owner C-suite officer)!
• “Company applicant” generally means the individual who made the filing that established the business as a separate legal entity (e.g. business owner, attorney, paralegal, etc.) and if applicable, a second individual who directed the filing (e.g. business owner, attorney, accountant, etc.). Reporting companies formed prior to 2024 are not required to report the company applicant.

A reporting company provides legal name, federal taxpayer ID, state of formation and U.S. address. A reported person and company applicant provide legal name, date of birth, current address and unique government-issued ID number (e.g. U.S. passport or state driver’s license accompanied by an uploaded photo copy). These data points are referred to by FinCEN as “beneficial ownership information” (BOI).

Filing must be electronic, it is only through FinCEN’s secure website https://boiefiling.fincen.gov/ and has the following deadlines:

1. Reporting companies created or registered to do business in the United States before January 1, 2024 must file by January 1, 2025.
2. Reporting companies created or registered to do business in the United States in 2024 have 90 calendar days to file after receiving actual or public notice that their company’s creation or registration is effective.
3. Reporting companies created or registered on or after January 1, 2025 will only have 30 calendar days to file.
4. Reporting companies that need to update or correct previously reported information have 30 calendar days to file an updated BOIR. There is no annual filing requirement unless reporting information has changed.

Failure to file the Beneficial Ownership Information Report, when required, could result in civil penalties (of up to $500 for each day that the violation continues), criminal penalties (of up to two years imprisonment) and a large fine (of up to $10,000). 

More information is available on the FinCEN’s website: https://www.fincen.gov/boi (which includes the Small Entity Compliance Guide and FAQs about the BOI reporting requirements).

Toolkit: https://www.fincen.gov/boi/toolkit

If you wish for McClenaghan Law Group to file a BOI report, please email us by November 15, 2024 at Amy@LawDublin.com

A fee of $200.00 will be charged per Entity for preparation of this BOI Report. Payment for these services will be due upon receipt. Services for preparation of your return do not include auditing or verification of information provided by you.

Any information provided to our office will be treated as confidential and is subject to disclosure by our firm only at your request or when required by law or regulatory matters.

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Some Common Priorities You May Consider

• Avoiding probate. Many people want their loved ones to avoid the probate process because it can be expensive, time-consuming, and public. It can also be difficult for a loved one to manage while they are grieving.
• Avoiding conservatorship or guardianship.Estate planning is not just about what happens when you die. There may come a time when you are alive, but unable to manage your own affairs (this is commonly referred to as being incapacitated). If you have not legally appointed someone to manage your finances or make medical decisions for you, your loved ones may be forced to appear before a judge and petition to have someone appointed to take on these roles. This process can also be expensive and time-consuming and is public as well.
• Making post-death administration easy for your loved ones. One of the reasons people have an estate plan is to make things easier for their loved ones. By having legally enforceable tools in place, your loved ones can follow your instructions and hopefully have a peaceful administration after you pass.
• Ensuring your loved ones have everything they need. How much your loved ones need will depend on their unique needs. If you have a loved one who will require a lot of care (a minor child or family member with special needs), they may end up taking a majority of the inheritance you leave behind, which means that there may be less money for other things.
• Providing and protecting an inheritance for your child or grandchild. You can create a plan so that the inheritances you leave to your beneficiaries are held over time, with distributions being made at certain ages, stages in life, or at the discretion of a trusted person you designate to be in charge. There are many ways to structure these types of inheritances, and you should know the pros and cons of each.
• Disinheriting a family member. You may want to leave a family member out of your estate plan. If you disinherit a family member who thought they might receive something, there is a possibility that the family member may contest the will or trust which could lead to your loved ones ending up in probate court to settle the dispute.
• Providing for charities. Whether for tax or philanthropic reasons, giving money to charity can be a great way to leave a lasting legacy.
• Reducing estate tax liability. If you want to include estate tax planning in your estate plan, you may have to decide between saving your loved ones from estate tax liability and retaining control over some of your money and property while you are alive.

What You Need to Do to Prepare

You can take the following steps now to ensure that your wishes are reflected in your estate plan and that we can help you create a realistic plan.

1. Make a list of everything you own and any outstanding debts. You need to do a preliminary inventory to ensure everyone is on the same page regarding how much money may be available at your death. Although this amount may fluctuate with time, a current inventory gives your advisors a snapshot of your financial situation. Do not forget to include any life insurance death benefits in your calculation because, although you may not benefit from it during your lifetime, it will be part of the inheritances you pass on to your loved ones.
2. Make a list of your priorities and the people or organizations you want to leave money to. Make a list of the priorities that you would like addressed in your estate plan. You can take this one step further by listing the loved ones and organizations you would like to provide for at your passing, an estimate of how much you would like to provide to each, and how you would like them to receive it. We can discuss these details further, but this will help you by getting all of your thoughts on paper.
3. Meet with your trusted advisors. After considering your wishes, meeting with your advisor team is the next step. Each advisor will be able to offer specific insights as to how we can help you carry out your plan. A financial advisor can look at your current financial situation and make investment recommendations to support the gifts you want to make at your passing. Your certified public accountant or tax advisor can look at what you currently own and see what strategies can be used to make the most of your gifts. As your estate planning attorneys, we can help you craft the important tools in a legally enforceable way that conveys your wishes.

Creating an estate plan can be one of the greatest gifts you give to your loved ones. Schedule an appointment to learn more about how we can design a plan to meet your unique needs.

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While the reasons for not having a will vary, the end result is the same for everyone: they do not get to choose who receives their property when they die. Instead, their money and property are distributed according to the laws of their state.

This is not necessarily a bad thing. In most states, a person’s spouse, children, parents, and siblings are given priority in the line of succession. But even if someone is fine with their next of kin receiving all of their money and property, a beneficiary can still be required to go through a long and costly court process when there is no will.

State law can only assume how the typical person would dispose of their estate. When a state’s default intestacy laws do not align with the actual preferences of the decedent about who should get what, this can lead to a number of issues. State intestacy laws vary in detail and can quickly get complicated, especially when a family is blended and does not have a typical structure.  

Nonblood Beneficiaries

Default intestacy laws can leave out not only stepchildren, foster children, and children placed for adoption, but also close family friends, charities, and others not related by blood.

Who Receives the Money and Property—and How Much

Intestacy laws are rigid about who receives how much. Intestate shares are statutorily determined and do not consider special circumstances. Parents commonly divide their money and property equally among their children, but no law requires this, and there are good reasons why some parents do not want equal distributions. State intestacy laws preclude unequal distribution as well as intentional disinheritance of a child.

Other Problems

Intestacy can also give rise to the following additional issues:

• Loved ones are unable to make specific funeral arrangements.
• The court decides who raises minor children.
• Property that the decedent intended to keep in the family could be sold.
• The probate process can be lengthy, and delay how soon loved ones receive money and property.
• Probate costs can drain money and property that otherwise would have gone to heirs.
• Arguments can break out between heirs about what the decedent would have wanted.

Do Not Leave Your Legacy Up to the State

There are many reasons for not making an estate plan. You may think you are too young, do not have enough money and property, or cannot afford estate planning. But a better question might be, can you afford not to have a plan? A basic estate plan can fit your budget and allow you to rest easy knowing your money and property will end up where you want them to go.

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