Who Are the Beneficial Owners of a Trust Under the CTA?

When a trust is connected to a company that must report to the Financial Crimes Enforcement Network (FinCEN), four categories of people can qualify as beneficial owners of a trust under the Corporate Transparency Act: grantors or settlors who can revoke the trust or pull assets back out, trustees with authority to dispose of trust property, beneficiaries who are the sole permissible recipients of trust income and principal or who can demand substantially all of the assets, and anyone else who exercises substantial control over the reporting company through the trust arrangement. One boundary matters before any of this: a March 2025 interim final rule exempted every domestic entity from BOI reporting, so the categories below now only bite when a foreign reporting company’s ownership runs through a trust, or when a domestic entity that already filed wants to understand what it reported.¹

When a Trust Actually Triggers Reporting

There are two very different ways a trust can be involved with the reporting regime, and the analysis is not the same for each.

The first way is when the trust itself is the reporting company. That only happens if the trust was created or registered by filing a document with a secretary of state or similar government office, which covers statutory trusts and business trusts in jurisdictions that require such filings. A standard revocable living trust or irrevocable family trust set up through a private trust agreement, with no state filing, was never a reporting company in the first place. Registering a trust with a court just to establish jurisdiction over future disputes doesn’t count either.²

The second and far more common way is when a trust holds ownership interests in a separate reporting company such as an LLC or corporation. FinCEN looks through the trust to identify the natural persons behind it. Under 31 CFR § 1010.380, a beneficial owner is any individual who directly or indirectly exercises substantial control over a reporting company, or who owns or controls at least 25 percent of its ownership interests.³

One other boundary: a trust that qualifies for one of the 23 statutory exemptions is outside the reporting requirement entirely. The exemption most relevant to trusts covers organizations described in Section 501(c) of the Internal Revenue Code and trusts described in Section 4947(a), which includes charitable remainder trusts and certain split-interest trusts.²

Grantors and Settlors

A grantor, also called a settlor, is the person who creates the trust and transfers assets into it. For beneficial ownership purposes, the question is whether the grantor kept the right to revoke the trust or withdraw its assets. If so, the grantor is a beneficial owner of any reporting company whose interests the trust holds.²

That makes revocable trust grantors nearly automatic beneficial owners. The trust can be undone at any time during the grantor’s lifetime, so the grantor effectively still controls the assets.

Irrevocable trusts change the picture. Once a grantor gives up the power to revoke or withdraw, that specific route to beneficial ownership closes. The grantor might still qualify through a different route if the trust terms leave them with enough influence to exercise substantial control over the reporting company’s important decisions. FinCEN has said its list of trust-related scenarios is not exhaustive and turns on particular facts and circumstances.²

Trustees

Trustees hold legal title to trust property and manage it for the beneficiaries. Under the regulation, a trustee can qualify as a beneficial owner through two separate paths. First, as someone with authority to dispose of trust assets, the trustee controls ownership interests the trust holds. Second, the trustee may exercise substantial control over the reporting company by voting shares held in the trust, making business decisions for the company, or directing its operations.³

FinCEN’s final rule commentary made this explicit: a trustee can exercise substantial control over a reporting company through the exercise of powers over the trust corpus, such as exercising control rights associated with shares held in trust.⁴

Co-Trustees

When multiple trustees share management authority, each one who exercises substantial control qualifies as a beneficial owner. There is no cap on how many individuals a reporting company can identify as exercising substantial control. Three co-trustees who all participate in directing the reporting company’s decisions all get reported.⁵

Corporate Trustees

When a bank or other institutional trustee manages the trust, the reporting company has the option to report the name of the corporate trustee in place of identifying the individuals behind it. That shortcut is available only when three conditions are all satisfied: the corporate trustee qualifies for one of the 23 BOI exemptions (banks typically do, as exemption number three), the individual’s connection to the reporting company runs solely through their ownership interest in the corporate trustee, and that individual does not exercise substantial control over the reporting company through any other channel.²

If any one of those conditions fails, the reporting company has to look through the corporate trustee and figure out whether any of the trustee’s own individual beneficial owners indirectly own or control at least 25 percent of the reporting company’s interests.

Beneficiaries

Not every beneficiary is a beneficial owner. The regulation draws a narrow line. A beneficiary qualifies only if they are the sole permissible recipient of income and principal from the trust, or if they have the right to demand or withdraw substantially all of the trust assets.³

Someone with a discretionary interest, where the trustee decides whether and when to distribute, generally does not qualify. A remainder beneficiary waiting for a future interest to vest does not qualify either. The rule targets people who can actually reach the assets today.

A beneficiary with withdrawal rights over substantially all of the trust’s property is treated much like an outright owner. If you can send a letter and walk out with the trust property, the regulatory view is that you are the real economic owner of whatever the trust holds.

Minor Child Beneficiaries

When a beneficial owner is a minor child, the reporting company can substitute a parent or legal guardian’s information for the child’s. The BOI report has a specific checkbox for this, and the filer completes the beneficial owner section with the parent’s or guardian’s details and identification documents.⁶

Trust Protectors and Other Power Holders

Trust protectors sit in a gray area. They typically hold powers to remove and replace trustees, change the trust’s governing jurisdiction, modify distribution standards, or terminate the trust. The regulation does not mention trust protectors by name, and FinCEN’s final rule commentary noted questions about them without giving a definitive answer.⁴

The substantial control test has a catch-all: any individual who has “any other form of substantial control” over the reporting company can be a beneficial owner. A trust protector who can fire and replace the trustee, amend the trust instrument, or change who receives distributions can plausibly direct or substantially influence the reporting company’s important decisions. What matters is the powers the trust document actually grants, not the title.³

This is where the analysis gets missed. If a family friend was named trust protector with the power to remove the trustee, that person may need to be reported as a beneficial owner of any reporting company the trust controls. Evaluate every power holder against the substantial control factors rather than assuming only the trustee matters.

What Gets Reported for Each Beneficial Owner

For each beneficial owner, the BOI report requires:

Full legal name, including first, last, middle name if applicable, and suffix
Date of birth
Residential address, including street, city, state, country, and ZIP code
A non-expired identification document (state driver’s license, state or local ID, U.S. passport, or a foreign passport only if none of the domestic options are available), along with its number, issuing jurisdiction, and an image of the document

The identification document hierarchy is strict. A foreign passport is accepted only when the individual has none of the three domestic options.⁶

Anyone who would rather not share their personal details with every reporting company they touch can apply for a FinCEN Identifier, a unique number that can be reported in place of the individual’s personal information on any BOI report. It’s optional, but it simplifies things when one person is a beneficial owner of multiple entities.⁷

Deadlines and Penalties

Under the current interim final rule, only foreign reporting companies still have filing obligations, and each one is exempt from reporting any beneficial owner who is a U.S. person. In practice, a foreign trust or foreign entity registered in the United States only reports beneficial owners who are not U.S. citizens or residents.⁸ A foreign entity that registers to do business in the United States has 30 calendar days from the earlier of when it receives actual notice of registration or when a secretary of state first provides public notice.⁹

Whenever previously reported information changes (a new trustee is appointed, a beneficiary gains withdrawal rights, an owner moves), the reporting company has 30 days to file an updated report. The same 30-day window applies when a filer discovers a previous report was inaccurate.²

Willful violations carry both civil and criminal consequences. The statutory civil penalty is $500 per day the violation continues, adjusted annually for inflation; FinCEN’s most recently published adjusted figure is $591 per day.² Criminal penalties reach up to two years in prison and fines of up to $10,000, and apply to willfully failing to file, filing false information, or failing to correct information the filer knows is inaccurate. Inadvertent errors generally don’t trigger criminal liability, but ignoring the requirement after learning about it almost certainly will.

Domestic entities that filed BOI reports before the March 2025 exemption took effect don’t need to update or correct them. The interim final rule expressly relieved them of that obligation.¹

1
FinCEN. FinCEN Removes Beneficial Ownership Reporting Requirements for US Companies and US Persons
2
FinCEN. BOI FAQs
3
eCFR. 31 CFR 1010.380 – Reports of Beneficial Ownership Information
4
Federal Register. Beneficial Ownership Information Reporting Requirements
5
FinCEN. BOI Small Compliance Guide
6
FinCEN. Beneficial Ownership Information Report Filing Instructions
7
FinCEN. FinCEN ID Application for Individuals
8
FinCEN. Beneficial Ownership Information Reporting
9
Federal Register. Beneficial Ownership Information Reporting Requirement Revision and Deadline Extension