Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:30):
Well, good afternoon, michiganers. It is Tuesday, February twenty five,
twenty twenty five, and of course this is Tuesday with Tom,
Michigan's only weekly internet show where we answer your questions
about a state planning and a state settlement in Michigan.
And we have actually been answering those questions now for
(00:54):
nine years.
Speaker 2 (00:56):
The first episode of Tuesday with Tom was.
Speaker 1 (00:59):
On We were a twenty third twenty sixteen in which
I talked about what is an estate plan So anniversary
celebration today.
Speaker 2 (01:12):
Doesn't seem possible.
Speaker 1 (01:14):
That nine years have gone by in producing this podcast,
But of course I am your host, Tom Doyle, estate
planning attorney, lifelong Michigan resident, and ambassador for all things.
Speaker 2 (01:27):
Good in this great state of Michigan.
Speaker 1 (01:32):
Welcome, Welcome, Welcome to this anniversary episode.
Speaker 2 (01:40):
Today, last episode how.
Speaker 1 (01:44):
To save your children from a twenty percent capital gains
tax on your home. If you're thinking about transferring your
home or other real estate perhaps or even other assets
to your children by way of a gift, and those
assets have appreciated, I invite you to be sure to
(02:05):
listen to last week's episode before you make that gift,
so that you understand whether or not you might be
passing on a capital gains tax to your children. Today's
episode the question will the Corporate Transparency Act affect your
(02:30):
estate plan? But please remember what I'm about to discuss
during this program is, as always for educational purposes only.
Speaker 2 (02:39):
It is not intended to be legal advice. You need
to work with your.
Speaker 1 (02:43):
Attorney and in this case, your tax advisor excuse me
to determine what is appropriate for you and your estate plan.
Speaker 2 (03:05):
Will the Corporate.
Speaker 1 (03:06):
Transparency Act affect your estate plan?
Speaker 2 (03:09):
Well, let's begin with what is.
Speaker 1 (03:12):
The Corporate Transparency Act or abbreviated as CTA, which took
effect on January first, twenty twenty four and introduce new
reporting requirements for certain business entities. While the goal of
the Act is to prevent financial crimes, the Act can
(03:34):
actually have significant implications.
Speaker 2 (03:37):
For your estate planning. So again, what's the Act?
Speaker 1 (03:41):
Well, the Act basically requires small businesses, especially corporations and LLCs,
to report there what they call beneficial ownership information to
the Financial Crimes Enforcement Network. So the idea is that
if you have a small business which is a corporation
(04:03):
or an LLC, you might now have the obligation or
you likely in fact do have the obligation to report
who owns or who has the beneficial ownership of that
business entity to the federal government. So who qualifies as
a beneficial owner, Well, it's anyone who owns at least
(04:27):
twenty five percent of the entity or has substantial control
over it. So the government hopes that what this will
do will curb anonymous ownership for illicit purposes. The idea
being these businesses have to report to the government who
(04:48):
owns them, and hopefully by doing that there will not
be as much anonymous ownership of entities that might be
involved in illicit per purposes. But for state planning, it
can in fact introduce new consideration. So how can the
(05:08):
CTA impact the state planning. Well, let's kind of break
it down for what it might mean for you. Many
estate plans involve trusts that hold business ownership. You might
have a trust. Maybe you have a business that is
owned as an LLC or owned as a corporation, and
(05:30):
part of the funding of your trust might involve transferring
ownership of that LLC or of that corporation to your trust. Well,
if you do that under the CTA, trustees grantors or
beneficiaries who might now qualify as beneficial owners are going
(05:56):
to be required to report their information to the federal government.
So if you have a trust and you're going to
be transferring an LLC, maybe you have maybe you don't
have an LLC set up for a business, but pretty
common for a lot of clients, they took a family
cottage and converted it to an LLC as a way
(06:17):
to continue ownership of the cottage and use by the
family into the future. Or perhaps you have some rental properties,
and in part of the conversation that we oftentimes have
with clients about rental properties when we're setting up a trust,
is do they first want to transfer ownership of the
(06:38):
rental property to an LLC for asset protection purposes, to
put someone in between you and your trust and the
property in case there is somebody who gets seriously injured.
Speaker 2 (06:54):
On that property.
Speaker 1 (06:56):
Or maybe you're a farmer and you're looking at part
of your estate plan, and part of that plan, again
more from an asset protection strategy, might be you take
your equipment, put it into a separate LLC, and then
you have the business into a separate LLC, so.
Speaker 2 (07:13):
You can end up with these multiple.
Speaker 1 (07:18):
Business entities that now are going to be subject to
the reporting requirements of the CTA.
Speaker 2 (07:27):
So that's the first thing.
Speaker 1 (07:31):
Your trustees or you as the grandeur, or the beneficiaries
of the trust might now be considered beneficial owners, requiring
them to report their information. A second concern oftentimes, when
(07:51):
we're talking to clients about preparing a trust in particular,
they might consider the trust as a tool for protecting privacy.
We'll have a conversation that if your state has to
go through probate, that's a public process. Anybody can go
down to the probate court and learn information about your assets.
Speaker 2 (08:12):
But by having a trust, normally.
Speaker 1 (08:15):
A trust is going to protect privacy because the trust,
at the normal trust that's prepared for a state plan
is a private entity. However, now these new reporting requirements
mean that some individuals are going to have to disclose
their information to the federal government, which is essentially limiting
(08:39):
some of that anonymity for those certain business structures. It's
not that they were looking at doing something illicit with
the business structure, but they like the fact that something
inside a trust, nobody has a public record where they
can go down and find out.
Speaker 2 (09:00):
But now if that trust.
Speaker 1 (09:02):
Is going to have inside it LLC's or corporations, then
that information is likely going to have to be disclosed
to the federal government. It can also impact your business
succession planning. If you're thinking about passing down a business
(09:27):
to your heirs, be it and it's an LLC or
a corporation, Now the CTA may require the disclosure of
new beneficial owners so that when you die and.
Speaker 2 (09:43):
Your business now is passed down to your heirs, your heirs.
Speaker 1 (09:48):
Might now be obligated to disclose their beneficial ownership of
that asset, which basically means it can create extra administrative
hurdles or families who are managing business transitions. So in
settling your trust, if you have a trust, or if
your estate is going to go through probate and that
(10:11):
LLC or corporation is going to be passed on through
the probate process, or maybe your LLC or business is
set up to take advantage of transfern ownership opportunities where
it's going to transfer directly to a beneficiary without having
to go through probate and without having a trust. In
(10:32):
all of those cases, though, now the individuals receiving that
LLC or the individuals receiving those businesses might now have
to concern themselves, along with everything else that's involved in
settling your estate, with reporting their business ownership information.
Speaker 2 (10:54):
To the feeds. Essentially, what does that mean?
Speaker 1 (10:58):
Well, really that is going to to potentially increase the
compliant obligation by the person settling your state, whether it's
the executor or a personal representative or a trustee. And
you as a business owner, now you have to stay
on top of these reporting requirements in order to avoid penalties,
(11:19):
because non compliance could lead to fines and even criminal consequences.
Speaker 2 (11:26):
So what do you do?
Speaker 1 (11:28):
What steps might you want to take in order to
protect your state plan? Well, one, review your business entities
identity by which of those entities need to report under
the CTA and so you can take a look at
your entities. Do you have LLC's, do you have corporations?
(11:49):
You should talk to your tax advisor who's primarily at
kind of the front end, if you will, of the
reporting that occurs, and check with them to see do
you have reporting obligations and have you met those reporting
obligations under the CTA and if not, have them work
(12:10):
with you to accomplish that Two, determine beneficial ownership. Try
and look at who actually is the beneficial owner of
these businesses, these LLCs, and these corporations in your current structure.
Speaker 2 (12:31):
Three, keep detail records.
Speaker 1 (12:33):
Make sure that you maintain up to date ownership records
because doing that is going to make compliance easier.
Speaker 2 (12:43):
So if information.
Speaker 1 (12:45):
Has to be reported to the federal government, by maintaining
up to date ownership records, Who are the beneficiaries of
your trust? Who are the perhaps the personal representative that
you've pointed under your will or your successor trustees that
you have under your trust, Names, addresses, contact information, etc.
(13:08):
Make sure that information is kept up to date so
that when there are obligations to report, compliance.
Speaker 2 (13:15):
Will be easier.
Speaker 1 (13:16):
And finally, consult with professionals. These can get complicated. Our
recommendation is that you start with your tax advisor because
oftentimes these entities that are created also have tax implications that.
Speaker 2 (13:31):
Go along with them.
Speaker 1 (13:33):
You can also reach out to your legal advisor who
is involved in having put together or is planning your
current estates. So the CTA, the Corporate transmittery Act, is
basically introducing a new layer of regulatory oversight that under
(13:55):
circumstances might impact estate plans involve business entities, so whether
you have a trust, an LLC, or corporation as part
of your state strategy, understanding these new requirements is essential
for you to avoid legal pitfalls. So if you have
(14:19):
any questions, reach out to your tax advisor, or you
can certainly reach out to us at Doyle Lot PC
to learn about how the CTA might affect your estate planning.
(14:53):
Of course, Amanda and I would be honored even if
you don't have questions about the CTA, but we would
be honored to have the opportunity to help you protect
your loved ones by putting together your estate plan, a
mending a plan that you already have, even if it's
one that we didn't prepare, or assisting you in settling
an estate. All the information about scheduling appointments with us,
(15:17):
whether it's going to be in person consultations at our
lansing office location on West Saint Joe or our Grand
Rapids location on Ottawa Now, or is it going to
be a virtual consultation via Zoom or telephone. All of
that information on how to schedule those consultations will be
found at our website. Doyle LAWPC dot com. Also, maybe
(15:43):
all you're looking for is an individual document. You need
a new, let's say, certificate of trust because you're selling
real estate on behalf of a trust. Visit our Legal
Store again available at Doyle LAWPC dot com and you
will find out how you can actually order individual documents
through the legal store. Information on ordering legal documents is
(16:07):
also available through the DOYLAPC Facebook page.
Speaker 2 (16:25):
Well, I think.
Speaker 1 (16:26):
That that is going to be it for today's anniversary show.
Speaker 2 (16:32):
As always, though, if you have.
Speaker 1 (16:33):
A comment about our program, a topic that you'd like
to have me discuss, or questions you'd like to have answered,
just head on over to Tuesday with Tom dot com,
leave a voice message by clicking on the microphone, or
send me an email. That would be Tom at Tuesday
with Tom dot com. We invite you please follow us
on Facebook. Invite your friend and families to follow us.
(16:56):
That would be Tuesday with Tom. You can follow the
office as well at Doyle Law PC, and don't forget
to join our email list. You can subscribe for our email.
It's a monthly e newsletter. Today's February twenty fifth edition
actually went out today, but you can subscribe to that
newsletter at Tuesday with Tom or at DOYLELAWPC dot com.
(17:21):
Remember two, Tuesday with Tom is available on Apple Podcasts, Spotify,
Amazon Music, Google Podcast, iHeartRadio, Speaker, and perhaps any service
where you normally that or that you normally use to
listen to your podcast. And if you use a service
(17:41):
and you don't find Tuesday with Tom there, let me
know and we'll reach out to that service and see
if we can't have that service added to our list
of channels where the program is available.
Speaker 2 (17:55):
You can also always ask.
Speaker 1 (17:57):
Your smart speaker to play Tuesday with Tom. Well, thanks
again for spending some of your time with us today
and as always, I hope that you have an awesome
day and an awesome.
Speaker 2 (18:11):
Week in Michigan. Stay safe now.
Speaker 1 (18:19):
Tuesday with Tom has been brought to you by the
estate planning attorneys at Doyle Law PC. To learn how
we can help you with your estate plan or with
settling a loved one's estate, please call us today at
five one seven three two three seven three sixty six.
That's five one seven three two three seven three sixty six.
Well, good afternoon, michiganers. It is Tuesday, February twenty five,
twenty twenty five, and of course this is Tuesday with Tom,
Michigan's only weekly internet show where we answer your questions
about a state planning and a state settlement in Michigan.
And we have actually been answering those questions now for
(00:54):
nine years.
Speaker 2 (00:56):
The first episode of Tuesday with Tom was.
Speaker 1 (00:59):
On We were a twenty third twenty sixteen in which
I talked about what is an estate plan So anniversary
celebration today.
Speaker 2 (01:12):
Doesn't seem possible.
Speaker 1 (01:14):
That nine years have gone by in producing this podcast,
But of course I am your host, Tom Doyle, estate
planning attorney, lifelong Michigan resident, and ambassador for all things.
Speaker 2 (01:27):
Good in this great state of Michigan.
Speaker 1 (01:32):
Welcome, Welcome, Welcome to this anniversary episode.
Speaker 2 (01:40):
Today, last episode how.
Speaker 1 (01:44):
To save your children from a twenty percent capital gains
tax on your home. If you're thinking about transferring your
home or other real estate perhaps or even other assets
to your children by way of a gift, and those
assets have appreciated, I invite you to be sure to
(02:05):
listen to last week's episode before you make that gift,
so that you understand whether or not you might be
passing on a capital gains tax to your children. Today's
episode the question will the Corporate Transparency Act affect your
(02:30):
estate plan? But please remember what I'm about to discuss
during this program is, as always for educational purposes only.
Speaker 2 (02:39):
It is not intended to be legal advice. You need
to work with your.
Speaker 1 (02:43):
Attorney and in this case, your tax advisor excuse me
to determine what is appropriate for you and your estate plan.
Speaker 2 (03:05):
Will the Corporate.
Speaker 1 (03:06):
Transparency Act affect your estate plan?
Speaker 2 (03:09):
Well, let's begin with what is.
Speaker 1 (03:12):
The Corporate Transparency Act or abbreviated as CTA, which took
effect on January first, twenty twenty four and introduce new
reporting requirements for certain business entities. While the goal of
the Act is to prevent financial crimes, the Act can
(03:34):
actually have significant implications.
Speaker 2 (03:37):
For your estate planning. So again, what's the Act?
Speaker 1 (03:41):
Well, the Act basically requires small businesses, especially corporations and LLCs,
to report there what they call beneficial ownership information to
the Financial Crimes Enforcement Network. So the idea is that
if you have a small business which is a corporation
(04:03):
or an LLC, you might now have the obligation or
you likely in fact do have the obligation to report
who owns or who has the beneficial ownership of that
business entity to the federal government. So who qualifies as
a beneficial owner, Well, it's anyone who owns at least
(04:27):
twenty five percent of the entity or has substantial control
over it. So the government hopes that what this will
do will curb anonymous ownership for illicit purposes. The idea
being these businesses have to report to the government who
(04:48):
owns them, and hopefully by doing that there will not
be as much anonymous ownership of entities that might be
involved in illicit per purposes. But for state planning, it
can in fact introduce new consideration. So how can the
(05:08):
CTA impact the state planning. Well, let's kind of break
it down for what it might mean for you. Many
estate plans involve trusts that hold business ownership. You might
have a trust. Maybe you have a business that is
owned as an LLC or owned as a corporation, and
(05:30):
part of the funding of your trust might involve transferring
ownership of that LLC or of that corporation to your trust. Well,
if you do that under the CTA, trustees grantors or
beneficiaries who might now qualify as beneficial owners are going
(05:56):
to be required to report their information to the federal government.
So if you have a trust and you're going to
be transferring an LLC, maybe you have maybe you don't
have an LLC set up for a business, but pretty
common for a lot of clients, they took a family
cottage and converted it to an LLC as a way
(06:17):
to continue ownership of the cottage and use by the
family into the future. Or perhaps you have some rental properties,
and in part of the conversation that we oftentimes have
with clients about rental properties when we're setting up a trust,
is do they first want to transfer ownership of the
(06:38):
rental property to an LLC for asset protection purposes, to
put someone in between you and your trust and the
property in case there is somebody who gets seriously injured.
Speaker 2 (06:54):
On that property.
Speaker 1 (06:56):
Or maybe you're a farmer and you're looking at part
of your estate plan, and part of that plan, again
more from an asset protection strategy, might be you take
your equipment, put it into a separate LLC, and then
you have the business into a separate LLC, so.
Speaker 2 (07:13):
You can end up with these multiple.
Speaker 1 (07:18):
Business entities that now are going to be subject to
the reporting requirements of the CTA.
Speaker 2 (07:27):
So that's the first thing.
Speaker 1 (07:31):
Your trustees or you as the grandeur, or the beneficiaries
of the trust might now be considered beneficial owners, requiring
them to report their information. A second concern oftentimes, when
(07:51):
we're talking to clients about preparing a trust in particular,
they might consider the trust as a tool for protecting privacy.
We'll have a conversation that if your state has to
go through probate, that's a public process. Anybody can go
down to the probate court and learn information about your assets.
Speaker 2 (08:12):
But by having a trust, normally.
Speaker 1 (08:15):
A trust is going to protect privacy because the trust,
at the normal trust that's prepared for a state plan
is a private entity. However, now these new reporting requirements
mean that some individuals are going to have to disclose
their information to the federal government, which is essentially limiting
(08:39):
some of that anonymity for those certain business structures. It's
not that they were looking at doing something illicit with
the business structure, but they like the fact that something
inside a trust, nobody has a public record where they
can go down and find out.
Speaker 2 (09:00):
But now if that trust.
Speaker 1 (09:02):
Is going to have inside it LLC's or corporations, then
that information is likely going to have to be disclosed
to the federal government. It can also impact your business
succession planning. If you're thinking about passing down a business
(09:27):
to your heirs, be it and it's an LLC or
a corporation, Now the CTA may require the disclosure of
new beneficial owners so that when you die and.
Speaker 2 (09:43):
Your business now is passed down to your heirs, your heirs.
Speaker 1 (09:48):
Might now be obligated to disclose their beneficial ownership of
that asset, which basically means it can create extra administrative
hurdles or families who are managing business transitions. So in
settling your trust, if you have a trust, or if
your estate is going to go through probate and that
(10:11):
LLC or corporation is going to be passed on through
the probate process, or maybe your LLC or business is
set up to take advantage of transfern ownership opportunities where
it's going to transfer directly to a beneficiary without having
to go through probate and without having a trust. In
(10:32):
all of those cases, though, now the individuals receiving that
LLC or the individuals receiving those businesses might now have
to concern themselves, along with everything else that's involved in
settling your estate, with reporting their business ownership information.
Speaker 2 (10:54):
To the feeds. Essentially, what does that mean?
Speaker 1 (10:58):
Well, really that is going to to potentially increase the
compliant obligation by the person settling your state, whether it's
the executor or a personal representative or a trustee. And
you as a business owner, now you have to stay
on top of these reporting requirements in order to avoid penalties,
(11:19):
because non compliance could lead to fines and even criminal consequences.
Speaker 2 (11:26):
So what do you do?
Speaker 1 (11:28):
What steps might you want to take in order to
protect your state plan? Well, one, review your business entities
identity by which of those entities need to report under
the CTA and so you can take a look at
your entities. Do you have LLC's, do you have corporations?
(11:49):
You should talk to your tax advisor who's primarily at
kind of the front end, if you will, of the
reporting that occurs, and check with them to see do
you have reporting obligations and have you met those reporting
obligations under the CTA and if not, have them work
(12:10):
with you to accomplish that Two, determine beneficial ownership. Try
and look at who actually is the beneficial owner of
these businesses, these LLCs, and these corporations in your current structure.
Speaker 2 (12:31):
Three, keep detail records.
Speaker 1 (12:33):
Make sure that you maintain up to date ownership records
because doing that is going to make compliance easier.
Speaker 2 (12:43):
So if information.
Speaker 1 (12:45):
Has to be reported to the federal government, by maintaining
up to date ownership records, Who are the beneficiaries of
your trust? Who are the perhaps the personal representative that
you've pointed under your will or your successor trustees that
you have under your trust, Names, addresses, contact information, etc.
(13:08):
Make sure that information is kept up to date so
that when there are obligations to report, compliance.
Speaker 2 (13:15):
Will be easier.
Speaker 1 (13:16):
And finally, consult with professionals. These can get complicated. Our
recommendation is that you start with your tax advisor because
oftentimes these entities that are created also have tax implications that.
Speaker 2 (13:31):
Go along with them.
Speaker 1 (13:33):
You can also reach out to your legal advisor who
is involved in having put together or is planning your
current estates. So the CTA, the Corporate transmittery Act, is
basically introducing a new layer of regulatory oversight that under
(13:55):
circumstances might impact estate plans involve business entities, so whether
you have a trust, an LLC, or corporation as part
of your state strategy, understanding these new requirements is essential
for you to avoid legal pitfalls. So if you have
(14:19):
any questions, reach out to your tax advisor, or you
can certainly reach out to us at Doyle Lot PC
to learn about how the CTA might affect your estate planning.
(14:53):
Of course, Amanda and I would be honored even if
you don't have questions about the CTA, but we would
be honored to have the opportunity to help you protect
your loved ones by putting together your estate plan, a
mending a plan that you already have, even if it's
one that we didn't prepare, or assisting you in settling
an estate. All the information about scheduling appointments with us,
(15:17):
whether it's going to be in person consultations at our
lansing office location on West Saint Joe or our Grand
Rapids location on Ottawa Now, or is it going to
be a virtual consultation via Zoom or telephone. All of
that information on how to schedule those consultations will be
found at our website. Doyle LAWPC dot com. Also, maybe
(15:43):
all you're looking for is an individual document. You need
a new, let's say, certificate of trust because you're selling
real estate on behalf of a trust. Visit our Legal
Store again available at Doyle LAWPC dot com and you
will find out how you can actually order individual documents
through the legal store. Information on ordering legal documents is
(16:07):
also available through the DOYLAPC Facebook page.
Speaker 2 (16:25):
Well, I think.
Speaker 1 (16:26):
That that is going to be it for today's anniversary show.
Speaker 2 (16:32):
As always, though, if you have.
Speaker 1 (16:33):
A comment about our program, a topic that you'd like
to have me discuss, or questions you'd like to have answered,
just head on over to Tuesday with Tom dot com,
leave a voice message by clicking on the microphone, or
send me an email. That would be Tom at Tuesday
with Tom dot com. We invite you please follow us
on Facebook. Invite your friend and families to follow us.
(16:56):
That would be Tuesday with Tom. You can follow the
office as well at Doyle Law PC, and don't forget
to join our email list. You can subscribe for our email.
It's a monthly e newsletter. Today's February twenty fifth edition
actually went out today, but you can subscribe to that
newsletter at Tuesday with Tom or at DOYLELAWPC dot com.
(17:21):
Remember two, Tuesday with Tom is available on Apple Podcasts, Spotify,
Amazon Music, Google Podcast, iHeartRadio, Speaker, and perhaps any service
where you normally that or that you normally use to
listen to your podcast. And if you use a service
(17:41):
and you don't find Tuesday with Tom there, let me
know and we'll reach out to that service and see
if we can't have that service added to our list
of channels where the program is available.
Speaker 2 (17:55):
You can also always ask.
Speaker 1 (17:57):
Your smart speaker to play Tuesday with Tom. Well, thanks
again for spending some of your time with us today
and as always, I hope that you have an awesome
day and an awesome.
Speaker 2 (18:11):
Week in Michigan. Stay safe now.
Speaker 1 (18:19):
Tuesday with Tom has been brought to you by the
estate planning attorneys at Doyle Law PC. To learn how
we can help you with your estate plan or with
settling a loved one's estate, please call us today at
five one seven three two three seven three sixty six.
That's five one seven three two three seven three sixty six.
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