Read more about the article Updates on the Corporate Transparency Act: Our Commitment to Keeping You Informed

Updates on the Corporate Transparency Act: Our Commitment to Keeping You Informed

At Sims & Campbell, our experienced estate planning attorneys are committed to providing our clients with the latest updates on legal developments that could impact them. To ensure you have the most accurate and timely information, we will now be posting all news regarding the Corporate Transparency Act (CTA) right here on our blog.

On March 2, 2025, the U.S. Treasury Department announced a suspension of the March 21, 2025, deadline for filing under the Corporate Transparency Act (CTA) for both domestic companies and U.S. citizens. Additionally, the Treasury announced it will not enforce any penalties or fines. This decision follows a series of legal and regulatory developments regarding the CTA and its enforcement. For more details, see below:

The Corporate Transparency Act (CTA) is a U.S. law that was enacted as part of the National Defense Authorization Act for Fiscal Year 2021. The purpose of the CTA is to enhance transparency in the ownership of companies and to combat illicit activities like money laundering, tax evasion, and terrorist financing by making it harder for criminals to hide behind anonymous shell companies. The CTA requires certain businesses, including corporations, limited liability companies (LLCs), and similar entities, to disclose information about their beneficial owners. A beneficial owner is an individual who, directly or indirectly, owns or controls at least 25% of a company or who exercises substantial control over it.

The CTA has far-reaching implications for both domestic and foreign companies, and understanding its requirements is essential for compliance. With that in mind, we’ll keep you up to date on any changes, deadlines, and new regulations that emerge. Read on for the latest news on the Corporate Transparency Act.

Here are the key takeaways:

  1. Suspension of the Filing Deadline: The Treasury has suspended the filing requirement under the CTA for domestic companies and U.S. citizens. The March 21, 2025, deadline is no longer applicable at this time.
  2. No Penalties or Fines At This Time: The Treasury Department announced it will not enforce any penalties or fines associated with the BOI reporting rule under the existing regulatory deadlines.
  3. Proposed Rulemaking to Narrow Scope: The Treasury is preparing a proposed rulemaking that could narrow the scope of the CTA’s reporting requirements to focus exclusively on foreign reporting companies. These are entities formed under foreign law but that have registered to do business in the U.S. by filing a document with a secretary of state or similar office.
  4. Legal Uncertainty: The proposed narrowing of the rule is inconsistent with the original text of the CTA and could be subject to legal challenges. While it is unclear who might challenge these changes, the possibility of legal action remains.
  5. Ongoing Legal Challenges: The CTA, which was passed during the first Trump Administration and implemented under the Biden Administration, has faced numerous legal challenges across the country. These challenges are still ongoing, with many cases pending before appellate courts.
  6. Impact on Information Already Filed: The Treasury has not clarified what will happen to the information already submitted under the CTA. Additionally, with the suspension of the enforcement of the filing deadline, domestic companies and U.S. citizens are no longer required to keep their submitted information up to date.

Stay tuned to our blog for the latest information on the Corporate Transparency Act and other legal matters that may affect you and your business. For additional questions or concerns, please contact our office to schedule a confidential estate planning meeting with one of our attorneys.

Estate Planning Hacks Create More Problems – Annapolis and Towson Estate Planning

The estate planning attorney in this gentleman’s neighborhood isn’t worried about this rancher’s plan to avoid the “courtroom mumbo jumbo.” It’s not the first time someone thought they could make a short-cut work, and it won’t be the last. However, as described in the article “Estate planning workaround idea needs work” from My San Antonio, the problems this rancher will create for himself, his wife, and his children, will easily eclipse any savings in time or fees he thinks he may have avoided.

Let’s start with the idea of putting all the man’s assets in his wife’s name. For starters, that means she has complete control and access to all the accounts. Even if the accounts began as community property, once they are in her name only, she is the sole manager of these accounts.

If the husband dies first, she will not have to go into probate court. That is true. However, if she dies first, the husband will need to go to probate court to access and claim the accounts. If the marriage goes sour, it’s not likely that she’ll be in a big hurry to return access to everything.

Another solution: set the accounts up as joint accounts with right of survivorship. The bank would have to specify that when spouse dies, the other owns the accounts. However, that’s just one facet of this estate planning hack.

The next proposal is to put the ranch into the adult children’s names. Gifting the ranch to children has a number of irreversible consequences.

First, the children will all be co-owners. Each one of them will have full legal control. What if they don’t agree on something? How will they break an impasse? Will they run the ranch by majority rule? What if they don’t want to honor any of the parent’s requests or ideas for running the ranch?  In addition, if one of them dies, their spouse or their child will inherit their share of the farm. If they divorce, will their future ex-spouse retain ownership of their shares of the ranch?

Second, you can’t gift the ranch and still be an owner. The husband and wife will no longer own the ranch. If they don’t agree with the kid’s plans for the ranch, they can be evicted. After all, the parents gave them the ranch.

Third, the transfer of the ranch to the children is a gift. There will be a federal gift tax return form to be filed. Depending on the value of the ranch, the parents may have to pay gift tax to the IRS.  Because the children have become owners of the ranch by virtue of a gift, they receive the tax-saving “free step-up in basis.” If they sell the ranch (and they have that right), they will get hit with capital gains taxes that will cost a lot more than the cost of an estate plan with an estate planning attorney and the “courtroom mumbo jumbo.”

Finally, the ranch is not the children’s homestead. If it has been gifted it to them, it’s not the parent’s homestead either. Therefore, they can expect an increase in the local property taxes. Those taxes will also be due every year for the rest of the parent’s life and again, will cost more over time than the cost of creating a proper estate plan. Since the ranch is not a homestead, it is subject to a creditor’s claim, if any of the new owners—those children —have a financial problem.

We haven’t even mentioned the family business succession plan, which takes a while to create and complements the estate plan. Both plans exist to protect the current owners and their heirs. If the goal is to keep the ranch in the family and have the next generation take the reins, everyone concerned be better served by sitting down with an estate planning attorney and discussing the many different ways to make this happen.

Reference: My San Antonio (April 29, 2019) “Estate planning workaround idea needs work”

Sims & Campbell, LLC – Annapolis and Towson Estate Planning Attorneys

Big Mistakes Add Up Big Time for Retirement – Annapolis and Towson Estate Planning

Retirement is a theoretical event happening way off in the future — until you celebrate your 55th birthday, when it starts to become all too real. When that lightening bolt strikes, says The Street, some mistakes may become obvious, as described in the article “Avoid These Big Mistakes in Your Retirement Planning.”

The biggest, most obvious and perhaps least followed lesson: do as much of the planning in advance as possible. Don’t wait until you wake up on your first day of retirement to figure it out.

Here are the top four mistakes people make:

Overlooking the impact of healthcare costs. Inflation in healthcare is more than three times the Consumer Price Index’s annual increase. Medical inflation hit an average of 6.8% in 2018, and it’s not likely going down any time soon. Medicare covers hospitalization (Part A) and doctor visits (Part B) but it does not cover many other critical costs. You’ll need to pay for long-term care, vision, dental, co-pays and deductibles.

As we age, our healthcare costs go up. When you are in the early stages of retirement, active, busy and healthy, it rises around 5%. But as you age, if you are lucky enough to do so, your health insurance costs could leap by 15% annually.

Planning for Medicare is very important.  It is where many retirees make big mistakes. You’ll need Medigap insurance to cover areas that Medicare does not. You’ll also want Part D to cover prescriptions.

The bigger Medicare mistake is failing to enroll at age 65. If you miss it, you’ll have to pay a penalty just to get enrolled in the program. It’s not easy to figure it out, and the instruction book is 130 pages long. The website is also confusing. However, you have to do it and do it right.

Neglecting to save. Really save. It’s next to impossible if you are twenty-something, have enormous student loans and have not gotten your career on track, to even think about retirement. It’s not easy and it’s not the first thing younger people are thinking about. However, the sooner you start putting money away for retirement, the more time you have for the money to grow. If your company offers a retirement plan, start putting something away, even if it’s a small amount. Over time, that company retirement account will grow, your income will grow and you will be better positioned for retirement. Automatic deductions will make this more likely to happen. If your parents are nagging you about retirement, make them happy: sign up for the plan at work and go for the auto deductions. It’s one less thing for them — and you — to worry about.

Poor investments. People who take a do-it-yourself approach to their investment portfolio vary in levels of success. Some devote a lot of time to it, including educating themselves about industry sectors and market performance, and others follow the ‘brother-in-law’ school, which usually tanks. That’s when your brother-in-law boasts about how much money he made in a particular stock. However, he neglects to tell you about how many losses he’s taken along the way. A team approach of an educated investor with a professional financial advisor is a better way to go.

Thinking you know it all. Overconfidence has sunk many retirements. People who are highly successful in life think that career success will automatically translate into retirement and financial planning. It’s also very hard for these types of people to accept that there’s something they do not know and cannot control. It is even harder for them to ask for help.

Failing to plan includes the failure to work with an experienced estate planning attorney in creating an estate plan that addresses tax planning, incapacity, transferring wealth to the next generation and asset distribution. Just like early savings make a big difference, having an estate plan created early in your life and updating as you go through life will help protect you and your loved ones.

Reference: The Street (April 11, 2019) “Avoid These Big Mistakes in Your Retirement Planning.”

Sims & Campbell, LLC – Annapolis and Towson Estate Planning Attorneys

Legitimate Power of Attorney Use Leaves Widow Impoverished – Annapolis and Towson Estate Planning

This is a cautionary tale about what can happen, when the wrong person is given power of attorney. The problem here is that a man changed his power of attorney without any review or oversight from any family members, including his own wife.

Why Dorothy Jorgenson’s husband changed his power of attorney just days before his death, is something that only he and the relative he named will ever know. However, the relative acted fast and took more than $70,000 from the couple’s joint bank account, says WPRI.com in the article, “Son questions power of attorney after mother’s bank account is drained.”

“When I went to pick up a prescription for my mother, there was insufficient funds to pick up a prescription,” Dorothy’s son, Gene Weston, said. “I can’t believe that someone would do that to an elderly woman.”

The couple had been married for almost twenty years. Both had added money to the account.

“My mother is still alive, and my mother needs to continue living,” Weston said.

The son called the police, because he claims there’s no way the power of attorney document for his stepfather was legitimate.

“He was on morphine at the time,” Gene Weston said.

According to a local police report, detectives interviewed several people and found Jorgensen’s husband was “only taking a minimal dose of meds.”

Police determined that Mr. Jorgensen “acted with his own free will” and ended their criminal investigation. However, these types of cases involving powers of attorney, often wind up in civil court. When people make a change to a power of attorney right before their death, it can raise concerns, especially when the person is elderly and on medication.

One thing that many people don’t know, is that they can limit the power of attorney document to protect a surviving spouse or family members.

It’s important to carefully choose an agent and make certain that the power of attorney is properly notarized. You should select a person whom you trust, and whom you know will do the right thing for you, in case you can’t make your own decisions.

Despite her actions, the relative who withdrew the money maintains her innocence.

Reference: WPRI 12 (April 15, 2019) “Son questions power of attorney after mother’s bank account is drained”

Sims & Campbell, LLC – Annapolis and Towson Estate Planning Attorneys