Do Trusts Really Have to File a BOI Report? – Don’t Make This Mistake + FAQs

Lana Dolyna, EA, CTC

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If you manage a trust, the new Corporate Transparency Act (CTA) can raise alarm. This landmark 2024 federal law requires an estimated 32 million U.S. entities to report their beneficial owners.

With such a broad reach, many trustees and estate planners are asking: Do trusts have to file Beneficial Ownership Information (BOI) reports under the CTA? Understanding the answer is crucial—mistakes could lead to costly penalties.

Do Trusts Need to File BOI Reports Under the CTA? The Definitive Answer

Under federal law, most trusts do not have to file a BOI report. The CTA’s reporting requirement applies to “reporting companies,” generally defined as corporations, LLCs, and other similar entities created by filing official formation documents with a state (or Tribal) authority. Typical trusts (e.g. family trusts, revocable living trusts, and other estate-planning trusts) are not created by any state filing – they’re usually formed by private agreement. Therefore, an ordinary trust is not a “reporting company” and has no direct CTA filing obligation.

However, there are important exceptions. A trust will have to file a BOI report if it meets the CTA’s definition of a reporting company. In practice, this means a trust that is formed by a state registration or incorporation-like process. Some examples include certain statutory trusts or business trusts – for instance, a Delaware Statutory Trust or a Massachusetts Business Trust – which are created by filing formation documents with the Secretary of State. These trust entities, because they were “created by filing” under state law, are treated similarly to corporations or LLCs under the CTA. Unless an exemption applies (more on that below), such a trust must file a BOI report with FinCEN.

It’s also critical to distinguish who must file from who must be reported. Even if your trust itself doesn’t file, the CTA can still involve your trust indirectly. If a trust owns or controls a significant stake in a reporting company (for example, your trust holds 100% of the membership interest in an LLC), then that company is required to file a BOI report and disclose the trust’s beneficial owners. Importantly, the CTA only recognizes individuals as beneficial owners, not the trust itself. So the trust won’t be named in the report, but the individuals behind the trust will be. Typically, the reporting company will need to list the trustee and possibly certain beneficiaries or trust creators as the “beneficial owners” (we’ll explain how those determinations are made). In short, most trusts do not independently file BOI reports under CTA, unless they are a state-formed entity. But whenever a trust is involved in owning a company, you must examine the situation carefully to ensure proper reporting by the company of the people associated with the trust.

Key CTA Exemptions for Trusts – When No BOI Report Is Needed

Before a trust or any entity files a BOI report, it should check if it qualifies for an exemption under the CTA. The law provides 23 categories of exempt entities that do not have to file, even if they technically meet the “reporting company” definition. Several of these exemptions can apply to trust-related structures. In fact, many trusts that would otherwise trigger a report end up being exempt due to their nature or purpose. Below are some key CTA exemptions relevant to trusts, and what it takes to qualify:

Large Operating Company Exemption: This exemption is for entities engaged in substantial U.S. business. To qualify, the entity (including a trust organized as a business) must: (A) have more than 20 full-time U.S. employees, (B) have a physical office within the U.S., and (C) have filed a U.S. federal income tax return in the last year showing over $5 million in gross receipts or sales from U.S. sources. A trust that actually runs an active business with employees (unusual but possible in a statutory trust) could use this exemption. Most family trusts holding passive assets won’t meet these criteria.
Bank or Trust Company Exemption: Entities registered as banks are exempt. If a trust is structured as or within a bank or financial institution (for example, a state-chartered trust company that is regulated under banking laws), it falls under this exemption. In short, trust companies or trusts that are essentially banks do not have to file BOI reports because banks already disclose ownership to regulators.
Tax-Exempt Entity Exemption: Many charitable and nonprofit trusts benefit here. The CTA exempts any entity that is described in §501(c) of the Internal Revenue Code and is tax-exempt under §501(a). This includes 501(c)(3) charitable organizations. Notably, the exemption also extends to certain trusts described in IRC §4947(a)(1) or (2) (which cover charitable trusts and split-interest trusts). In plain terms, if your trust is operated exclusively for charitable purposes and has tax-exempt status (or is a private foundation or charitable remainder trust meeting those IRC definitions), it does not have to file a BOI report.
Subsidiary of an Exempt Entity: If a trust is an entity wholly owned (directly or indirectly) by one or more exempt entities, it is also exempt. For example, suppose a 501(c)(3) charitable trust establishes a wholly-owned LLC or statutory trust to carry out some functions; that subsidiary entity would be exempt as a “subsidiary of a tax-exempt entity.” (Be cautious: partial ownership by an exempt entity doesn’t count – it must be 100% owned by exempt parents to qualify.)
Inactive Entity Exemption: This is a very narrow exemption for old, dormant entities. To qualify, an entity must have been in existence on or before January 1, 2020, have no ongoing business, no foreign owners, no significant assets, no changes in ownership in the last 12 months, and no large financial transactions (above $1,000) in the last 12 months. It’s unlikely a trust would deliberately meet these rigid criteria (they’re aimed at old shell companies). But conceivably, a long-standing statutory trust that has been completely inactive could qualify.

To clarify how some of these exemptions apply to various trust structures, see the table below:

Trust Structure or Entity	CTA Filing Required?	Exemption Applicable (If Any)	Criteria/Notes
Family Trust (Revocable/Living or Irrevocable)	No (not a “reporting company”)	N/A – Not an entity under CTA	Created by private agreement, not by state filing, so it’s outside CTA by definition (no report needed).
Statutory Business Trust (e.g. Delaware Statutory Trust)	Yes, if no exemption applies	Possible Large Operating Co. or other exemption if criteria met	Formed by state filing, so it is a reporting company. Must file BOI unless it qualifies for an exemption (e.g. meets the 20 employees/$5M rule, or is wholly owned by an exempt parent, etc.).
Charitable Trust with 501(c)(3) Status	No	Tax-Exempt Entity exemption	Recognized by IRS as a 501(c) nonprofit (or a §4947 charitable trust). CTA expressly exempts these from reporting.
State-Chartered Trust Company (Trust acting as a bank)	No	Bank exemption	Considered a bank or similar financial institution under banking laws. Already regulated, so exempt from CTA reporting.
Trust’s Wholly-Owned LLC (subsidiary example)	Yes (the LLC must file)	Subsidiary of Exempt Entity, if applicable	If the trust is exempt (e.g. a charity) and fully owns an LLC, that LLC is exempt too. Otherwise, the LLC must file and report the individuals behind the trust.
Inactive Old Trust Entity	No (if qualifies)	Inactive Entity exemption (rare)	Must meet all inactivity criteria (pre-2020, no activity, no changes, etc.). This is uncommon for trusts.

Bottom line: Even if a trust is technically a reporting company, it often falls under an exemption (especially for charitable trusts and regulated trust companies). Always check the full list of CTA exemptions – qualifying for one means no BOI report is required. But if no exemption applies, the trust-entity must prepare to file just like any corporation or LLC would.

Common Pitfalls and Costly Mistakes to Avoid

When navigating BOI reporting with trusts, people often misunderstand the rules or overlook critical details. Here are common pitfalls and mistakes – and how to avoid them:

Assuming “Trust = Reporting Company.” Many hear about the CTA and think every legal arrangement has to report. In fact, ordinary trusts do not file their own BOI reports. Don’t waste time trying to register a family trust with FinCEN – it’s not required (and there’s no mechanism to do so). Exception: If your trust is one of those rare types created by a state filing, then yes, it’s a reporting company (and you should proceed as such). The mistake is not recognizing the difference. Solution: First determine if your trust was formed by any official state registration. If not, it’s likely not subject to direct reporting.
Forgetting the trust-owned company still must report. Just because your trust itself doesn’t file doesn’t mean nothing needs to be done. If your trust owns an LLC, corporation, or any reporting company, that company must file a BOI report. A common error is trustees thinking “the trust isn’t a company, so we’re off the hook.” Meanwhile, the LLC the trust owns goes unreported – which violates the CTA. Solution: Identify all entities your trust owns or controls. Ensure each of those companies files its BOI report on time, including the required data on the trust’s beneficial owners.
Listing the trust’s name as a beneficial owner. The BOI report asks for individuals. A trust itself is not an individual, and you should never list “The John Smith Family Trust” as a beneficial owner. If you do, the report will be incorrect. Instead, you must report the people who ultimately own or control the company through the trust (such as the trustee or beneficiaries with certain rights). Solution: Understand the CTA’s definition of beneficial owners in a trust scenario (see the next section). Always list the appropriate individuals (natural persons) – not entities or trusts – as beneficial owners.
Missing a statutory trust’s obligation. Some may assume all trusts are exempt. If you have a statutory trust or similar business trust that you formed by filing with your state, do not overlook that it’s treated like any other company under CTA. We’ve seen mistakes where such trusts were left unreported because owners assumed “it’s just a trust.” Solution: If your trust has articles of trust or a certificate filed with a state, treat it as a reporting company unless you confirm an exemption. File the BOI report for it, listing its beneficial owners (e.g., the trustee or any individual who ultimately controls it).
Overlooking updates and changes. Fulfilling the initial BOI filing is not the end. If circumstances change – say, a new trustee is appointed, a beneficiary gains or loses rights that affect ownership, or the trust transfers part of its company interest – the reporting company must update its BOI report within 30 days of the change. A common mistake is to “set it and forget it.” Solution: Create a compliance calendar. Whenever there’s a change in the trust (trustee/beneficiary) or in ownership % that could affect who is a beneficial owner, update the FinCEN report promptly.
Ignoring CTA compliance due to legal uncertainty. It’s true that the CTA’s implementation has seen some legal challenges (there have been court injunctions and deadline extensions in play). Some trustees might think they can “wait and see” or that the law might not apply after all. This is risky. As of now, the law is moving forward, and FinCEN will expect compliance once final deadlines are confirmed. Solution: Stay informed about CTA developments, but operate on the assumption that reporting will be required. Don’t bank on lawsuits or delays to excuse non-compliance.
Underestimating the penalties. Failing to file or filing incorrectly is not a trivial matter. The CTA imposes severe penalties for non-compliance. We’re talking civil fines of up to $500 per day (up to $10,000 total per violation) and even criminal penalties (up to 2 years in prison for willful violations or providing false information). A trust that neglects to report its ownership of a company, or a person who willfully avoids being named, could face these consequences. Solution: Take the reporting requirements seriously. Double-check whether any entity associated with your trust needs to file. When in doubt, consult an attorney – it’s far cheaper than fines or legal trouble.

By being aware of these pitfalls, trustees and advisors can avoid costly mistakes. Diligence in understanding who needs to file and what information to report will keep your trust in compliance and out of trouble.

Breaking Down Key Terms: “Beneficial Owner,” “Reporting Company,” and Other CTA Jargon

The Corporate Transparency Act introduced a lot of new terminology. To confidently determine your trust’s obligations, you need to understand these key terms and definitions – and how they apply in the context of trusts:

Reporting Company: This is the cornerstone definition. A reporting company under CTA is any corporation, limited liability company, or other similar entity that is created by filing a registration document with a U.S. state (or Indian tribe), or a foreign entity that is registered to do business in the U.S. by filing. This includes not just LLCs and corporations, but also limited partnerships, LLPs, and business trusts that register with a state. A trust is generally not a reporting company unless it falls into that “other similar entity” category via a state filing. So, an ordinary trust = not a reporting company; a statutory trust = yes, a reporting company (absent an exemption).
Beneficial Owner: The CTA requires identifying the beneficial owners of each reporting company. A beneficial owner is any individual (a real, flesh-and-blood person) who, directly or indirectly, either exercises substantial control over the company or owns or controls at least 25% of the company’s ownership interests. This definition casts a wide net to capture those really in charge or profiting. Importantly, a beneficial owner must be an individual – not another company, not a trust, not an estate. If a trust owns part of a company, the people behind the trust are examined to see who qualifies as beneficial owners (e.g., the trustee, or a beneficiary with certain powers). The law also lists some exceptions to who is considered a beneficial owner – for example, minor children (the parent/guardian is reported instead), agents or nominees acting on behalf of someone else, heirs through estates (temporarily), and creditors (just by being a creditor doesn’t make you a beneficial owner). But these are special cases. In a trust scenario, usually at least one person connected to the trust will count as a beneficial owner if the trust’s stake is significant.
Substantial Control: This term is a component of the beneficial owner definition, and it’s especially relevant for trusts. “Substantial control” means any kind of significant influence over the company’s important decisions or actions. The regulations give examples: having authority over appointment or removal of senior officers or a majority of the board, having veto power or influence over large expenditures or reorganizations, serving as a senior officer, etc. For trusts, FinCEN explicitly stated that an individual can exercise substantial control “directly or indirectly, including as a trustee of a trust or similar arrangement.” In practice, if a trust owns a company, the trustee often is considered to exercise substantial control (because the trustee can vote the shares or interests owned by the trust and make decisions regarding those assets). So a trustee will almost always be a reportable beneficial owner under the “substantial control” prong if the trust’s stake is large enough to matter in the company. Trust protectors or advisors (individuals given special powers in some trust agreements) might also be deemed to have substantial control if their powers effectively influence the company’s decisions. Each trust’s governance has to be analyzed, but remember: control can be formal or informal. If through any arrangement a person can direct the company’s major actions, that person likely has “substantial control” under CTA.
25% Ownership or Control: The other prong of being a beneficial owner is owning or controlling at least 25% of the ownership interests of the reporting company. Ownership interests can mean equity, stock, capital or profit interests, or any instrument convertible into equity. It’s broadly defined. When a trust holds shares or membership units, who is deemed to “own or control” those? FinCEN’s rules say that individuals who have certain significant rights in the trust may be treated as owning the company interest. For example, if a single beneficiary is entitled to all the income and principal of the trust (or can withdraw substantially all assets), that beneficiary is treated as owning the trust’s interest in the company – thus they are a 25% owner if the trust’s share is 25% or more. Similarly, the grantor (creator) of a revocable trust – if they can revoke the trust or take back its assets at will – is considered to own whatever the trust owns (since they retain ultimate control over the assets). In short, the CTA “looks through” the trust: if one person has the lion’s share of benefit or control rights in the trust, that person is credited with owning the company stake for BOI reporting purposes. On the other hand, if a trust’s ownership is truly split among multiple people (no single beneficiary can demand everything, trustee has balanced duties to several people, etc.), then perhaps no one beneficiary hits 25% ownership on their own – but the trustee still might be listed under the control prong.
Company Applicant: This term is less about ongoing reporting and more about initial formation. A company applicant is the person who files the formation documents for a reporting company (or the person on whose behalf it is filed). If your trust forms a new LLC or company after January 1, 2024, the initial BOI report for that company will also require info on the company applicant (typically, the lawyer or individual who filed the articles). For existing entities formed before 2024, you do not need to report a company applicant. This mostly matters if, say, a trustee or lawyer filed to create a statutory trust or LLC owned by a trust in 2024 or later – their info goes on the first report.
Beneficial Ownership Information (BOI) Report: This is the actual submission to FinCEN that a reporting company makes. The BOI report is an electronic filing that includes: (1) identifying information about the reporting company (legal name, any DBAs, address, jurisdiction, and taxpayer ID number), (2) identifying information about each beneficial owner (full legal name, date of birth, current residential address, a unique ID number such as from a passport or driver’s license, and an image of the ID), and (3) identifying info about the company applicant (for new entities). If a trust is a reporting company, it will file this report for itself. If a trust owns a reporting company, that company’s report will include the individuals related to the trust as beneficial owners with the above information. One thing to note: FinCEN offers an optional “FinCEN identifier” that individuals (or entities) can obtain by submitting their info once, and then just provide that ID to companies instead of their personal details each time. For example, if a trustee is a beneficial owner for 10 different trust-owned LLCs, the trustee could get a FinCEN ID and give it to all 10 LLCs to use in their reports – this centralizes the personal info at FinCEN under an ID, potentially reducing the spread of sensitive data. Using FinCEN IDs is not mandatory, just a convenience.
Exempt Entity: As discussed earlier, an exempt entity is a company that meets one of the 23 exemptions in the CTA. An exempt entity does not have to file a BOI report and does not have to report its beneficial owners. Examples include publicly traded companies, government-owned entities, banks, credit unions, broker-dealers, investment funds, and the various categories we highlighted (large operating companies, nonprofits, etc.). If a trust or trust-owned entity is exempt, it’s outside the BOI reporting regime. It’s worth noting: if an entity is exempt, any subsidiaries it wholly owns are also exempt (except in a few specific exemption categories that aren’t inheritable). Also, if an exempt entity partly owns a reporting company, that reporting company still has to file, but the exempt entity itself is not listed as a beneficial owner (nor are that entity’s owners). For instance, if a charitable trust (exempt) and a private person jointly own an LLC, the LLC must file; it will report the private person (if over 25% or control) but not the charitable trust or its trustees (because the trust is exempt and effectively “invisible” for BOI purposes).

Understanding these terms arms you with the vocabulary to interpret guidance and requirements. In practice, when dealing with trusts, the key takeaway is: identify the individuals who ultimately control or benefit, because those are the people the law wants to shine light on.

Real-World Examples: When Trusts Must File (and When They Don’t)

To make the concepts concrete, let’s walk through a few common scenarios involving trusts and outline whether a BOI report is required and who is named. These examples will illustrate the nuanced ways the CTA can apply to trusts:

Example 1: Family Trust Owning an LLC (No Direct Filing by Trust)

Scenario: Jane Doe has a revocable living trust (a typical family trust) that holds 100% of the membership interest in Doe Investments LLC. Jane is the trustee and also the grantor of the trust, and her adult daughter is the successor beneficiary.

Who Files: The LLC is a reporting company (an LLC formed by state filing), so Doe Investments LLC must file a BOI report. The trust itself does NOT file anything with FinCEN.

Who is Reported as Beneficial Owner(s): The LLC’s BOI report will look through the trust to identify individuals:

Jane (Trustee/Grantor): Jane exercises substantial control over the LLC by virtue of being the trustee (she controls the trust’s LLC interest). Also, as the grantor with a revocation power, she is considered to own the LLC’s interest. Jane will be listed with her personal info as a beneficial owner.
Daughter (Beneficiary): The daughter is not the sole beneficiary now (since Jane, while alive, controls the trust and can use its assets). She also cannot demand distributions while Jane is alive. So at present, the daughter likely is not listed as a beneficial owner. (If Jane were to die and the daughter became the trust’s sole beneficiary entitled to the assets, then the LLC would update its report to add the daughter.)
No Trust Entity Listed: The report will not mention “Jane Doe Trust” at all. It will list Jane Doe (and later her daughter when applicable) as the beneficial owners.

Result: Jane’s family trust did not have to file a BOI report, but Jane’s LLC did. The LLC’s report satisfied CTA by disclosing Jane’s information. The trust’s involvement is fully accounted for through Jane.

Example 2: Statutory Business Trust Running a Business (Filing Required)

Scenario: XYZ Real Estate Trust is a Delaware Statutory Trust (DST) created by filing a Certificate of Trust with Delaware. It was set up as an investment vehicle that owns and operates several commercial properties. The DST has a professional corporate trustee (ABC Trust Co.) and a group of 10 investors who are beneficiaries entitled to the trust’s income. It has 5 employees and about $2 million in annual revenue.

Who Files: The XYZ Real Estate Trust itself is a reporting company under the CTA (it’s an “other entity” created by a state filing). It does not meet the Large Operating Company exemption (only 5 employees, under $5M revenue) and doesn’t fall under other exemptions. Therefore, the trust must file a BOI report with FinCEN, just like an LLC or corporation would.

Who is Reported as Beneficial Owner(s): This part is more involved:

Trustee’s Individuals: Because the trustee is a corporate entity (ABC Trust Co.), we can’t list “ABC Trust Co.” as a beneficial owner (remember, only individuals). We must identify who ultimately controls ABC Trust Co. or the trust’s decisions. If ABC Trust Co. is a large bank or financial institution, it might itself be exempt (which complicates things, but let’s assume ABC Trust Co. is not exempt). The DST would likely report one or more senior officers or owners of ABC Trust Co. who have substantial control over the trust’s assets (perhaps the trust officer managing the account, or the CEO of the trust company, depending on circumstances). FinCEN’s guidance says when a trust has a corporate trustee, you look at the corporate trustee’s individual beneficial owners who can exercise control through the trust. In practice, XYZ Trust’s filing might list the individual trustee officer who has authority to manage the trust’s property.
Beneficiaries: The 10 investors each own a share of the trust’s beneficial interest. If any one investor’s share is 25% or more, that investor would be a beneficial owner by ownership. In our scenario, let’s say no single investor owns 25% (it’s evenly split 10% each, for instance). In that case, none of the beneficiaries are listed by virtue of ownership percentage. However, if the trust agreement gives one of these beneficiaries extra control rights (for example, maybe one is designated to approve certain decisions as a “trust advisor”), that person might be listed for substantial control. Assuming no special powers for beneficiaries in this case, the beneficiaries might not individually be reported (since none meet 25% and they don’t control the trust’s decisions individually).
Grantor/Settlor: If this DST was created by, say, a sponsor who retains rights to revoke or pull assets (unusual in an investment DST, but common in personal trusts), that person would be listed. In our scenario, XYZ Trust is irrevocable with no single grantor control (it’s a pooled investment), so likely no grantor to report.

Result: XYZ Real Estate Trust files its own BOI report. It provides its information and lists at least one individual linked to the trustee company as a beneficial owner (and possibly any controlling persons among beneficiaries). This way, even though it’s a trust, the government sees who is behind it managing or owning it. The 10 investor-beneficiaries, having relatively small and passive stakes, may not be individually reported in this scenario.

Example 3: Charitable Trust as Owner (Exempt from CTA Reporting)

Scenario: The Green Earth Trust is a charitable trust organized to fund environmental projects. It has IRS-recognized 501(c)(3) status. It was created by a trust instrument (no state formation filing). The trust has a trustee, Dr. Green, and a board of advisors. The trust also wholly owns a for-profit subsidiary corporation, Green Earth Innovations, Inc., which it uses to manufacture eco-friendly products and funnel profits back into the charity.

Who Files: The trust itself is exempt from CTA reporting because it’s a tax-exempt 501(c)(3) entity. What about its subsidiary corporation? The subsidiary would normally be a reporting company, but because it is wholly owned by an exempt entity (the trust), it qualifies for the subsidiary exemption. Therefore, neither the trust nor the corporation has to file a BOI report. They effectively fall completely outside the CTA’s reporting requirements.

Who is Reported as Beneficial Owner(s): No BOI report is filed at all, so there is no reporting of beneficial owners in FinCEN’s database for these entities. (If Green Earth Innovations, Inc. had other co-owners besides the trust, it might lose the subsidiary exemption and then it would have to report beneficial owners accordingly. But in this fully-owned case, it remains exempt.)

Result: This example shows that exemptions can remove the filing burden entirely. The key is the charitable status of the trust, which carries through to its wholly-owned entities. Dr. Green and the board don’t have to submit their personal info to FinCEN in this structure, because Congress decided bona fide charities are low-risk for money laundering and should be exempt.

These examples cover the common situations: a personal/family trust involved with a business, a trust that is itself an entity, and a charitable trust. In every case, think about two questions: Is the trust arrangement a reporting company itself? And if a trust is involved as an owner, which individuals from the trust need to be named? Answering those will usually get you to the correct compliance outcome.

Legal Evidence & Interpretations: Government Guidance on Trust Reporting

The requirements around trusts and BOI reporting are backed by official government rules and interpretations, as well as evolving legal developments. Here are some of the key legal guidances and evidence that clarify how trusts are handled under the CTA:

FinCEN’s Final Rule and Preamble: FinCEN (the Financial Crimes Enforcement Network, which administers the CTA) issued detailed regulations (31 CFR 1010.380) explaining how to identify beneficial owners in complex ownership chains – including trusts. The rule’s preamble and subsequent guidance make a few points crystal clear: (1) A trust registering with a court is not the same as forming an entity by a state filing – simply probating a will or registering a living trust for legal purposes does not turn it into a reporting company. (2) When defining “substantial control,” FinCEN explicitly included control via trust positions (e.g., a person can control a company “as a trustee”). (3) FinCEN expected that in any scenario where a trust holds an interest, at least one individual (such as a trustee) will end up being a beneficial owner of the company – because otherwise there’d be an unaccountable gap. These points in the official rulemaking make it evident that the government intends to capture personal details even in trust ownership situations without dragging the trust itself into filings.
FinCEN FAQs: FinCEN has published FAQs and compliance guides. One notable FAQ asks, “Who are a reporting company’s beneficial owners when individuals own or control the company through a trust?” The answer basically says: it depends on the facts of the trust, but gives concrete conditions to consider – for instance, if a trustee has authority to dispose of trust assets, if a beneficiary is the sole recipient of trust assets or can withdraw substantially all assets, or if a grantor has the right to revoke the trust, then those individuals are deemed to own or control the ownership interest the trust holds in a company. This aligns with what we described earlier: trustees, sole or all-powerful beneficiaries, and revocable trust grantors are prime candidates to be listed. FinCEN emphasizes that these are examples, not an exhaustive list – trusts vary widely, and one must look at the trust agreement and applicable law to see who really pulls the strings or reaps the benefits. The takeaway from FinCEN’s guidance is that they expect companies to peel back the trust veil and report the people with real power or entitlement. FinCEN has also clarified scenarios like minor beneficiaries (you report the parent/guardian instead) and agents (mere nominees don’t get reported; you find the real party in interest). All of this guidance serves as legal evidence of how strictly (and thoughtfully) the rules must be applied to trust arrangements.
Enforcement Perspective: While no enforcement actions have been taken yet (the law is new), the CTA’s legislative history shows Congress was targeting anonymous shell companies often used to hide illicit funds. Trusts can sometimes be used for secrecy, so the law was crafted to prevent a trust from being a loophole. For example, if someone tried to hide behind a trust by saying “the trust owns the company, and we won’t tell you who’s behind the trust,” that clearly would frustrate the CTA’s purpose. FinCEN’s interpretations ensure that won’t fly – either the trust is itself reportable or the humans behind the trust are. Lawyers generally interpret the CTA’s trust-related provisions as aiming to bring any trust-related ownership into full transparency (at least to regulators).
Legal Opinions & Commentaries: Legal experts (in law firm memos and seminars) consistently interpret that ordinary revocable or irrevocable trusts are not, by themselves, reportable entities. They point out the one big qualifier: statutory trusts likely are reportable, since they are legally akin to corporations/LLCs in formation. There has been some discussion about how far “other similar entity” goes – for example, is a common law partnership a reporting company? FinCEN indicated no, if no state filing. By the same logic, common law trusts are out of scope. The legal community also notes complexities like trusts with corporate trustees (as we saw) and urges practitioners to err on the side of reporting an individual if there’s any plausible argument they meet the criteria. Because the penalties are high, the advice is to be inclusive in identifying beneficial owners. If later FinCEN says you reported someone not needed, that’s far better than omitting someone you should have reported.
Court Challenges and Updates: A significant recent development was a legal challenge to the CTA’s constitutionality (on grounds such as privacy and administrative procedure). In late 2023, a federal court in Texas issued a preliminary injunction that paused the enforcement of the BOI reporting requirements nationwide. This created confusion and a temporary reprieve. However, as of early 2025, that injunction has been stayed (set aside), meaning the CTA reporting rule is moving forward again. FinCEN responded by announcing it would not enforce deadlines until it issues new ones, and it plans an interim final rule extending the initial filing deadlines. For practical purposes, this means companies (and any trust entities among them) got a bit more time, but the requirement is very much alive. The legal debate is ongoing – some organizations argue CTA overreaches, while others support it as vital for transparency. Trusts in particular haven’t been the central focus of these court arguments; the litigation is about the CTA as a whole. So, unless the entire act is struck down (which is uncertain and would likely take a long time if it ever happens), trustees should assume compliance will be required. Keep an eye on FinCEN’s announcements: if you have a trust that needs to report (or a company that your trust owns), note any new deadlines or forms once the dust settles.

In summary, the official interpretations underscore a theme: the CTA is designed to capture real human ownership and control, regardless of legal structures like trusts. Government guidance has deliberately closed loopholes that might have allowed anonymity via trusts. And while legal challenges have caused some timing hiccups, the core obligations are expected to remain. Always reference the latest FinCEN guidance or consult legal counsel for the most up-to-date interpretation, especially if your trust situation is unusual or borderline.

Federal vs. State-Level Considerations: Does State Law Impact CTA Reporting?

Trust law is primarily state law, which raises the question: Could state-specific rules change your CTA reporting obligations for trusts? The short answer is not much – CTA is a federal requirement that largely overrides or ignores state distinctions. However, understanding your state’s treatment of trusts can help determine if the CTA applies in the first place. Here are some key points on the interplay between federal and state law:

State Formation vs. Federal Definition: The CTA looks to whether an entity was “created by a filing” with a state. Each state has its own laws on what entities require a public filing to come into existence. For example, Delaware and a few other states have statutes for statutory trusts, where filing a certificate is part of the creation process. In those states, if you choose that form for your trust, you’ve triggered CTA coverage (unless exempt). In contrast, states like California or New York don’t require any filing to create a ordinary living trust or family trust; those trusts exist completely outside the state registry system, so CTA ignores them. Thus, whether a trust counts as a “reporting company” federally can hinge on state law: did your state treat your trust like a registered entity? If yes, CTA likely applies; if no, CTA doesn’t consider it an entity at all.
State Business Registrations: Even if a trust isn’t formed by a filing, sometimes a trust might register to do business in a state (for instance, a trust could register an assumed business name, or a land trust might record something). FinCEN has clarified that purely registering a trust with a court or recording a deed to a trust is not the kind of state filing that creates an entity. It has to be a constitutive filing (the kind you do to form an LLC or corporation). So, no state requires you to “incorporate” your standard trust. The only trusts that involve incorporation-like filings are those explicitly provided for by state statutes (business trusts, real estate investment trusts in some cases, etc.).
State Privacy Laws vs. Federal Reporting: Some states are known for their privacy in business registrations (e.g., Delaware, Nevada, Wyoming – where you can form an LLC without listing the owners publicly). Trusts themselves typically don’t appear in state public filings except maybe as owners of property. Regardless of how private your state allows your trust or company to be, the federal CTA will require reporting of beneficial owners to FinCEN. This is a confidential federal database, not public, but it means state-level anonymity does not equate to federal anonymity. For example, you might have a Nevada LLC owned by a trust; Nevada’s records might only show the LLC’s registered agent and maybe the manager, but CTA will compel the LLC to report to FinCEN who the beneficial owners are (trustee, etc.). In other words, state secrecy won’t shield you from CTA – the federal law preempts here, and you must comply regardless of your state’s leniency.
State-specific Trust Types: A few unique state law creatures can raise questions. For instance, Massachusetts Business Trusts (a historical form for mutual funds and some businesses) – Massachusetts treats them similarly to corporations in many respects. Under CTA, these are reporting companies (unless exempt by virtue of, say, being an SEC-registered investment company). Another example: some states allow land trusts (like Illinois land trusts) where title to real estate is held by a trustee; however, those land trusts are not created by a state filing – they’re created by contract – so by themselves they aren’t reporting companies. But if that land trust owns an LLC, the same logic applies: the LLC files and discloses the land trust’s beneficiaries as needed. The takeaway is, know your state’s trust vehicles. If you purposely set up a trust in a state that offers a statutory trust framework (like Delaware, Nevada, Wyoming, etc.), you likely did a state filing and have a reporting obligation.
No State-Level BOI Reports (for Now): It’s worth noting that CTA is a federal mandate. States are not (at this time) implementing their own beneficial owner reporting for trusts or companies, aside from what’s already required in certain regulated industries. CTA was in part enacted because states didn’t collect this info and the U.S. had a patchwork system. Now it’s centralized at FinCEN. So you generally do not have to file duplicate information with your state – everything goes to FinCEN. One exception: if your trust-owned entity is, say, a licensed business (like a state-licensed trust company or a casino or something), state regulators might require disclosure of owners, but that’s outside CTA and typically not secret. CTA is the uniform federal layer.
Interplay with State Law Fiduciary Duties: The CTA doesn’t override any state fiduciary duty or privacy duty a trustee might have under state law, but it does create a legal obligation to report notwithstanding any duty of confidentiality. For example, if a trust instrument says the trustee must keep the beneficiaries’ identities private, that doesn’t exempt a company from reporting those beneficiaries if they’re beneficial owners. Compliance with federal law would be seen as an exception to any such privacy clause. Trustees should be aware that reporting someone as a beneficial owner is a legal requirement, not a breach of confidentiality.

In essence, state law determines the form of your trust – if it’s an entity or just a contract – and that in turn determines if CTA sees it as reportable. Once that threshold is crossed, state law nuances take a backseat. The CTA imposes a federal standard that is uniform across all states. Every state’s trusts, if they fall under CTA, must provide the same information to FinCEN. The only role of state law is in the initial question: did a filing occur or not, and what rights do people have under the trust? After that, CTA’s criteria (25%, control, etc.) are what matter. Always check both layers: confirm what your state requires for the type of trust you have, then apply the federal CTA rules on top of that scenario.

Trusts vs. Other Legal Entities: How CTA Reporting Obligations Compare

To put trusts in context, it helps to compare them with other entities under the Corporate Transparency Act. Below is a comparison of trusts, LLCs, corporations, and partnerships regarding BOI reporting duties and key differences:

Entity Type	Reporting Company by Default?	BOI Report Required?	Notable Exemptions/Notes
Family Trust (Living/Revocable)	No – not created by state filing	No (trust doesn’t file)	Trust is not a legal entity under CTA. However, any company the trust owns must file and report the trust’s individual beneficial owners (e.g. trustee).
Statutory Trust (Business Trust)	Yes – formed by state filing	Yes, unless exempt	Treated like a corporation/LLC under CTA. Must file a report unless it qualifies for an exemption (e.g., charitable trust, large operating company criteria, etc.).
Corporation (Privately held)	Yes – formed by state filing	Yes, unless exempt	Must file BOI report. Notable exemption: Publicly traded companies (SEC-reporting companies) are exempt. Also, subsidiaries of exempt parent corporations can be exempt.
Limited Liability Company (LLC)	Yes – formed by state filing	Yes, unless exempt	Must file BOI report. Common small business LLCs have to report beneficial owners. Exemptions include LLCs wholly owned by an exempt entity, large LLCs meeting the 20 employee/$5M rule, etc.
General Partnership	No – no charter filed typically	No (no report required)	A traditional general partnership is formed by agreement, not public filing, so it’s not a reporting company. (If it registers as an LLP, see below.)
Limited Partnership (LP) or LLP	Yes – certificate/registration filed	Yes, unless exempt	LPs and LLPs file formation docs with the state, so they must report like corporations/LLCs. Exemptions can apply if, for example, an LP is wholly owned by exempt entities or qualifies as an inactive entity, etc.
Nonprofit Corporation/Charitable Trust	Yes – formed by filing (for nonprofits) / varies for trust	Generally No (exempt)	Even though these are formed by filing, most bona fide nonprofits are exempt if they have 501(c) status. Charitable trusts with such status are also exempt.
Estate (Probate estate)	No – created by law at death	No (not an entity under CTA)	An estate isn’t formed by a charter; it’s a legal status when someone dies. No BOI report. (If an estate holds company interests, after administration those interests may trigger reporting when transferred to heirs/trusts.)

Key insights from the table: Trusts stand out because most are not formed by filing, unlike LLCs or corporations. LLCs and corporations must default to reporting (unless exempt), whereas a family trust doesn’t report at all. Partnerships depend on type: unfiled general partnerships are off CTA’s radar, but LPs/LLPs are on it, similar to trusts (unfiled trust vs. filed statutory trust). Nonprofits of both trust and corporate form get a break via exemption. Understanding these differences can help you determine quickly whether an entity in question has a CTA obligation or not.

FAQs: Trusts and Beneficial Ownership Reporting Under CTA

Finally, let’s address some frequently asked questions that trustees, beneficiaries, and advisors have about how trusts interact with the Corporate Transparency Act. Each answer is concise (yes/no where possible) with a brief explanation:

Q: Do family trusts need to file BOI reports under the CTA?
A: No. A typical family trust isn’t a “reporting company” since it’s not formed by a state filing. It does not file a BOI report.

Q: Is a trust considered a reporting company under CTA?
A: Generally no. Only if the trust was created by a state filing (like a statutory business trust) would it be a reporting company that must file.

Q: If a trust owns an LLC, does the LLC still have to file a BOI report?
A: Yes. The LLC must file its BOI report even if a trust owns it. The trust itself won’t be listed, but the LLC’s report must list the trust’s individual beneficial owners (e.g., trustee).

Q: Are trustees considered beneficial owners under the CTA?
A: Yes, usually. A trustee often exercises substantial control over a company held in trust, so the trustee’s personal details must be reported as a beneficial owner.

Q: Do trust beneficiaries have to be reported in BOI filings?
A: Sometimes. If a beneficiary is essentially the sole recipient or can withdraw most trust assets, they count as a beneficial owner and must be reported. Otherwise, beneficiaries without controlling rights aren’t listed.

Q: Does a revocable living trust trigger any CTA reporting?
A: No. The trust itself doesn’t report. Only if it owns a reporting company would that company need to report the grantor/trustee as beneficial owners (since a revocable trust is transparent to its creator).

Q: Are charitable trusts exempt from CTA reporting?
A: Yes. Trusts with 501(c)(3) or similar tax-exempt status are exempt. They do not file BOI reports, and any entities they wholly own are also exempt.

Q: Is a statutory trust required to file a BOI report?
A: Yes, if it was created by a state filing and no exemption applies. A statutory trust is treated like any company under CTA and must report its beneficial owners.

Q: What happens if a trust that should report under CTA doesn’t do it?
A: Penalties apply. Failing to file (or filing false information) can lead to fines up to $10,000 and even criminal charges. Compliance is enforced even for trusts that qualify as reporting companies.