Revised Holiday Schedule

HOLIDAY HOUR EXTENSION

Our office has been preoccupied with BOI matters during the holiday so with that being the case, our office will be closed through 17 January, 2025 or earlier dependent upon BOI case movement.

The roller coaster continues but we are not riding it.

As stated in previous updates, we believe ultimately that the long arm of finCEN will prevail, even if it goes to the Supreme Court. Like it or not, "State" created entities are subservient to the state and federal government including statutory irrevocable trusts. Private Irrevocable Trusts are not required to file the BOI reports under the Corporate Transparency Act (CTA). If an irrevocable trust owns 25% or more of a reporting company or exercises significant control of it, individuals associated with the trust (e.g. trustees, beneficiaries, or settlors) may need to report BOI.

However, most trusts are excluded from direct reporting as they are not typically considered "reporting companies" under the CTA.

THIS IS NOT INTENDED TO BE LEGAL ADVICE. PLEASE CONSULT YOUR ACCOUNTING PROFESSIONAL.

UPDATE

A federal appeals court on Thursday reinstated a nationwide injunction halting enforcement of beneficial ownership information (BOI) reporting requirements, reversing an order the same court issued earlier this week.

In its latest order, the Fifth Circuit Court of Appeals said it was reinstating a lower court's injunction "in order to preserve the constitutional status quo while the merits panel considers the parties' weighty substantive arguments," referring to the panel of judges who will decide the appeal.

The AICPA has been urging the government to postpone the original Jan. 1, 2025, BOI reporting deadline. The requirements are imposed by the Corporate Transparency Act (CTA) and enforced by the Financial Crimes Enforcement Network (FinCEN).

In a statement Friday, the AICPA said it "is seeking guidance from FinCEN and maintains its advice for those assisting clients with BOI filings to gather information required from clients and be prepared to file in case the injunction is lifted again."

Later on Friday, FinCEN issued an updated alert on its BOI information page, saying that companies can voluntarily submit BOI reports.

"In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force," the FinCEN alert said. "However, reporting companies may continue to voluntarily submit beneficial ownership information reports."

On Dec. 3, a federal district court in Texas issued the injunction in Texas Top Cop Shop, Inc. v. Garland, No. 4:24-CV-478 (E.D. Texas 12/3/24). Under the injunction, the CTA and the BOI reporting rule could not be enforced, and reporting companies would need not comply with the Jan. 1, 2025, BOI reporting deadline pending a further order of the court.

Appeals court reinstates injunction that halts BOI enforcement

Holiday Schedule

To All-

Our office will close at Noon on 23 December, 2024 and will reopen on 6 January, 2025

Merry Christmas, Happy Hanukkah and Happy New Year!

Cheers!

OIW Trust Associates LLC

Section 4-10-410 - Noncharitable Trust Without Ascertainable Beneficiary.

 The Private Wyoming Perpetual Purpose Trust Statute.

4-10-410. Noncharitable trust without ascertainable beneficiary.

(a) Except as otherwise provided in W.S. 4-10-409 or by another statute, the following rules apply:

(i) A trust may be created for a noncharitable purpose without a definite or definitely ascertainable beneficiary or for a noncharitable but otherwise valid purpose to be selected by the trustee;

(ii) A trust authorized by this section may be enforced by a trust advisor, trust protector, person appointed in the terms of the trust or, if no person is so appointed, by a person appointed by the court;

(iii) Property of a trust authorized by this section may be applied only to its intended use, except to the extent the court determines that the value of the trust property exceeds the amount required for the intended use. Except as otherwise provided in the terms of the trust, property not required for the intended use shall be distributed to the settlor, if then living, otherwise to the settlor's successors in interest;

(iv) No common law rule limiting the duration of noncharitable purpose trusts is in force in this state.

A Perpetual Purpose Trust Without Beneficiaries - What's the Purpose

Three common goals of legacy planning are: (1) perpetual existence, (2) separating the principal of your legacy assets from the revenue those assets generate, and (2) separating the management and control of your legacy assets from who benefits economically. A purpose trust can swiftly accomplish all three.

First, many states – including Delaware, South Dakota, Nevada, and Wyoming – now permit “perpetual” trusts (i.e., trusts that can last forever) or trusts that can exist for an extraordinarily long period of time, such as 1,000 years.  Separating the principal of your legacy assets from the revenue those assets generate and separating the management and control of your legacy assets from those who benefit economically can be achieved in one fell swoop by setting up a multi-tiered trust structure. While your purpose trust can own your legacy assets through a corporate entity (let’s call it “Legacy Co.”), your legacy trust can provide that all of the income received from Legacy Co. be paid to one ore more traditional family dynasty trusts, of which your family can be beneficiaries. This will allow your family or other beneficiaries to benefit economically from your legacy assets without necessarily involving them in the management and control of those assets. Furthermore, by creating a separate vertical for the management and control of your legacy assets, you enable yourself to be intentional with the succession of that management and control and to integrate family members or outside advisors who are best qualified to oversee your legacy.

In a traditional dynasty trust structure, there is the problem of an ever-increasing pool of potential beneficiaries. Even if you build in the maximum protections for the Trustees and give the Trustees complete discretion with regard to how and when (if at all) to make distributions to beneficiaries, the Trustees of the traditional dynasty trust still have fiduciaries duties to those beneficiaries. As a result, the beneficiaries have legal standing to bring a lawsuit against the Trustees, which can put pressure on the Trustees or frustrate the system, potentially thwarting your legacy plan. With a “purpose” trust, there are no beneficiaries to whom the Trustees owe a fiduciary duty or who have legal standing to bring a claim against the Trustees for any reason. 

Instead, when you create a purpose trust you appoint someone (often called a “enforcer”) with the responsibility of ensuring the purpose(s) of the trust are being fulfilled. The result is that your Trustees are free to focus on carrying out your legacy plan as you intended.

Some of the common reasons for establishing a Perpetual Purpose Trust in Wyoming are:

Pet care (including offspring)

Maintenance of grave sites (honorary trusts); also, support of religious gravesite ceremonies

Maintenance of family property (for example, antiques, cars, jewelry and memorabilia)

Maintenance of an art collection

Maintenance of family homes (residence and vacation)

Long-term maintenance of building, property or land

Maintenance of business interests

Royalties

Digital asset protection

To provide for a philanthropic purpose not qualifying for a charitable deduction

Maintenance of private family trust companies

Maintenance of Special Purpose Entities/ Trust Protector Companies

See https://www.wealthmanagement.com/high-net-worth/patagonia-billionaire-who-gave-company-skirts-700m-tax-hit