No, FinCEN’s beneficial ownership requirements do not apply to land trusts and their trustees.

FinCEN’s beneficial ownership requirements apply only to “legal entity customers,” defined to include corporations, limited liability companies, general partnerships and any “other entity that is created by the filing of a public document with a Secretary of State or similar office.” Generally, trusts are excluded, “because a trust is a contractual arrangement . . . . Formation of a trust does not generally require any action by the state.”

Statutory trusts (also known as business trusts) are not excluded from the beneficial ownership requirements; these are special entities formed by filing a certificate of trust with a public official, similar to a business entity. However, Illinois land trusts are not formed by filing a document with a Secretary of State or similar office. Instead, they are formed by a contractual arrangement between the grantor, trustee, and beneficiaries. Consequently, Illinois land trusts are not subject to FinCEN’s beneficial ownership requirements. FinCEN has confirmed this conclusion in response to an email inquiry from the IBA (stating that “based on the information you provided, an Illinois land trust would not be subject to the rule”).

For resources related to our guidance, please see:

• 31 CFR 1010.230(e) (Effective May 18, 2018) (“Legal entity customer means a corporation, limited liability company, or other entity that is created by the filing of a public document with a Secretary of State or similar office, a general partnership, and any similar entity formed under the laws of a foreign jurisdiction that opens an account.”)

• FinCEN Frequently Asked Questions (FAQs), FIN-2016-G003 (July 19, 2016) (“Q: Are trusts included in the definition of legal entity customer? A: No. The definition of legal entity customers only includes statutory trusts created by a filing with the Secretary of State or similar office. Otherwise, it does not include trusts. This is because a trust is a contractual arrangement between the person who provides the funds or other assets and specifies the terms (i.e., the grantor/settlor) and the person with control over the assets (i.e., the trustee), for the benefit of those named in the trust deed (i.e., the beneficiaries). Formation of a trust does not generally require any action by the state. . . .”)

• Chicago Fed. Sav. & Loan Ass’n v. Cacciatore, 25 Ill.2d 535, 543 (Ill. 1962) (“Both the trust agreement and the deed to the trustee contain clauses used for many years in the creation of an Illinois land trust. We have recognized the validity of such a procedure to place in the trustee the full, complete and exclusive title to the real estate, both legal and equitable. The trust here is an active trust, and Cacciatore’s beneficial interest is personal property as distinguished from real estate by the terms of the recorded trust deed, the trust agreement itself, and by settled Illinois law.”)