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#2203393 - 01/18/19 03:08 PM BO- Trust owns the LLC
mnbsa Offline
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Joined: Jun 2018
Posts: 13
I have been trying to find concrete guidance on this but haven't found anything yet that gives a solid answer. My scenario is:
ABC LLC opens a business account
ABC LLC is owned 100% by the Smith Family Revocable Trust.

I may be overthinking it, but would we need to put the trustees (there are 2) as the beneficial owners as trustees of the trust?
John Doe as trustee of the Smith Family Revocable Trust owning 50%
Jane Doe as trustee of the Smith Family Revocable Trust owning 50%

Or is it allowed to just have the trust listed as 100% owner?

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#2203396 - 01/18/19 03:31 PM Re: BO- Trust owns the LLC mnbsa
McGruff Offline
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McGruff
Joined: Feb 2004
Posts: 262
Texas
Regardless of the number of trustees, each trustee has 100% control of the trust. Pick one and treat that one trustee as the (indirect) beneficial owner/controller of the LLC. You can list more than one trustee, but the reg only requires one.

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#2203400 - 01/18/19 03:48 PM Re: BO- Trust owns the LLC mnbsa
BrianC Offline
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BrianC
Joined: Nov 2004
Posts: 6,202
Illinois
FinCEN Beneficial Ownership FAQs are as concrete of guidance as we have.

Question 19: Collection of beneficial ownership information: Trusts with multiple trustees When 25 percent or more of the equity interests of a legal entity customer are owned by a trust that is overseen by co-trustees (multiple trustees), are covered financial institutions required to identify and verify the identity of all co-trustees?

No. If a trust owns directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, 25 percent or more of the equity interests of a legal entity customer, the beneficial owner under the ownership/ equity prong is the trustee. Where there are multiple trustees or co-trustees, financial institutions are expected to collect and verify the identity of, at a minimum, one co-trustee of a multi-trustee trust who owns 25 percent or more of the equity interests of a legal entity customer that is not subject to an exclusion. A covered financial institution may choose to identify additional co-trustees as part of its customer due diligence, based on its risk assessment and the customer risk profile and in accordance with the institution’s account opening procedures.
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#2207878 - 03/05/19 10:25 PM Re: BO- Trust owns the LLC mnbsa
CML LHS Offline
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CML LHS
Joined: Oct 2014
Posts: 18
WA
To clarify, if the trust is 50% owner of ABC LLC, and the trust has three co-trustees listed...would we list none of the trustees since each would have less than 25%? Or do we have to still list at least one of the co-trustees since the trust has equity interest over 25%?

I am asking this because there is a scenario chart circulated by a compliance consulting group that says the following:
"Jack's Donuts, Inc is owned 100% by J & J Trust. Jack, Jill, John, Jane and Sally are the Trustees (each have a 20% ownership)...
Beneficial Owner(s): Not Applicable (No individual owns at least 25% of Jack's Donuts)"

This scenario does not coincide with the notion that the trustees are not owners of a trust and therefore don't break down the Trust's percentage of ownership of the subject legal entity.

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#2207888 - 03/05/19 11:51 PM Re: BO- Trust owns the LLC CML LHS
RockChucker, CAMS Offline
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Joined: Jul 2013
Posts: 1,625
The Country
Originally Posted By CML LHS
To clarify, if the trust is 50% owner of ABC LLC, and the trust has three co-trustees listed...would we list none of the trustees since each would have less than 25%? Or do we have to still list at least one of the co-trustees since the trust has equity interest over 25%?

I am asking this because there is a scenario chart circulated by a compliance consulting group that says the following:
"Jack's Donuts, Inc is owned 100% by J & J Trust. Jack, Jill, John, Jane and Sally are the Trustees (each have a 20% ownership)...
Beneficial Owner(s): Not Applicable (No individual owns at least 25% of Jack's Donuts)"

This scenario does not coincide with the notion that the trustees are not owners of a trust and therefore don't break down the Trust's percentage of ownership of the subject legal entity.


You would list one of the trustees (doesn't matter which). Doesn't matter if there are 50 trustees, if the trust owns 25% or more you have to list a trustee. There are some trusts that are exempt but I'm assuming this trust isn't.
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#2207905 - 03/06/19 01:11 PM Re: BO- Trust owns the LLC mnbsa
praBSA Offline
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Joined: Aug 2018
Posts: 328
Agreed. You need to list at least one.

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#2208360 - 03/11/19 04:00 PM Re: BO- Trust owns the LLC mnbsa
CML LHS Offline
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CML LHS
Joined: Oct 2014
Posts: 18
WA
Thank you!

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