Persons involved in real estate closings and settlements are now required to report on certain transfers that the Treasury Department deems high risk for illicit financial activity. Specifically, non-financed transfers of residential real property to legal entities or trusts. The rule aims to in-crease transparency in real estate transactions and help prevent the use of anonymous entities to conceal illicit funds.Reports are filed through FinCEN’s website and must include the reporting person’s identity, details of the transferor and transferee (including beneficial owners and agents), property details, and consideration paid. Reports are due by the later of 30 days post-closing or the end of the following month, and records must be kept for five years.
Responsibility to file follows a cascade ranking among transaction participants. The highest party in the ranking is the one who files, with first priority falling to the closing/settlement agent listed on the closing/settlement statement. While attorneys are considered “reporting persons,” if a title company is involved in the transfer, their obligation to report would most likely supersede that of the attorney or other real estate professional.
The AMLR includes a reasonable reliance standard which allows the reporting party to rely on information provided to them by others when completing the report, as long as there is no doubt in the accuracy of the information and it’s certified in writing. Violations of the AMLR may result in civil or, if willful, criminal penalties, including fines and imprisonment.
Exemptions to the AMLR reporting requirement include direct purchases by individuals in their own name and many transfers found in common estate planning techniques. No reporting is required for transferees that are public companies, government entities, and regulated financial or insurance institutions (except title insurance companies). Estate planning trusts (revocable trusts established for probate avoidance) are exempt if the transfer is for no consideration and made by a grantor and/or spouse to a trust of which they are the grantors. Other exemptions cover transfers by inheritance, divorce, court order, bankruptcy, or under IRC §1031.
Did you know that Wisconsin is one of just nine states with marital (community) property laws? Wisconsin joined the small number of states with this treatment of marital property by enacting the Wisconsin Marital Property Act in 1986. Under Wisconsin’s marital property law, nearly all assets and debts acquired during a marriage are considered to be owned equally by both spouses, regardless of whose name is on the paycheck or whose name is on the title. The law is based on the principle that “a sound marriage is a partnership of equals,” recognizing the value of both financial and non-financial contributions to the relationship.
Even the best hitters can’t plan for every curveball life throws – but a strong estate plan, drafted by an experienced attorney familiar with your unique circumstances and goals, can bring your batting average up to all-star levels.
After Ted Williams passed away, confusion quickly ensued when two of his children presented a handwritten note expressing Mr. Williams’ desire that his body be cryogenically frozen. The problem? Mr. Williams’ will stated his wish to be cremated and have his ashes scattered over the ocean off the coast of Florida. The litigation that followed left Mr. Williams’ body frozen in controversy – like a batter getting thrown a 12-6 curveball.
Disputes like these can be avoided by properly documenting your wishes and by ensuring consistency across your estate planning documents. Wisconsin permits individuals to create Authorizations for Final Disposition – a special document that designates who will make burial or cremation decisions, and in which you may specify any specific funeral/celebration of life and burial arrangements.
At Lin Law LLC, we help families make sure their wishes are honored, their loved ones are protected, and their legacy is preserved.