Navigating The Corporate Transparency Act: Estate Plan Implications

The Corporate Transparency Act (CTA) is a federal law that took effect on January 1, 2024. It was enacted to curb money laundering, corruption, tax evasion, fraud, and other financial crimes. It requires entities organized or registered to do business in the United States to disclose information about the entity and who owns it to the U.S. federal government unless the entity qualifies for an exemption.

There are 23 reporting exemptions. Most people think their entity is so tiny that it must be exempt. However, the opposite is true. Exempt entities include, for example, banks and credit unions, registered broker-dealers, and significant operating companies. CTA is geared to provide information about smaller entities that otherwise may fly under the radar.