Under the beneficial ownership rules, if 50% of a corporation is owned by a revocable living trust, and that living trust is controlled by two trustees, do we report the trustees as each having a 25% beneficial ownership in the corporation?
No, a trustee does not own the funds in the trust. Further, trusts are not entities covered by the beneficial ownership rule unless they are statutory trusts. Statutory trusts are those created by a statute, such as real estate trusts in Delaware. These trusts are typically registered with a state agency, such as a Secretary of State. The beneficial ownership rule requires the bank to inquire as to ownership of the entity for which the account is created, and to drill down past levels of ownership until either natural persons or entities not subject to the rule are discovered. At that point, the drill down ceases and all natural persons with at least 25% ownership are reported. It is possible for the bank to complete the required drill down and discover that there are no beneficial owners as defined by the rule.
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