What Family Office Leaders are Saying About the Corporate Transparency Act
The Corporate Transparency Act (CTA) brings new complexity to family offices—particularly with trusts. To navigate this landscape, these organizations are embracing modern approaches to make compliance thorough, efficient, and penalty-free—not only for initial filings but also for ongoing regulatory management.
To gain a firsthand perspective on the CTA’s impact, we spoke with three industry leaders: Beth Horner, President and Chief Trust Officer at Third Lake Capital, LLC; David Naples, Vice President at Wolf Capital Management, LLC; and Melissa McNeill, CEO of Bay Haven Capital, Inc. They shared how the CTA has reshaped their operations and the proactive steps they’re taking to navigate compliance with confidence.
The Role of Trusts & Ownership Has Evolved
In the past, regulatory reporting around trusts was fairly straightforward—just name the trustee, and you were compliant. But the Corporate Transparency Act has changed that. Now, it’s not just the trustee we need to identify, but every role involved in the trust: the Grantor, the Trust Protector, Beneficiaries, and even Investment Directors. Each of these roles can potentially exercise control, and under the CTA, we need to be clear about who holds that control.
On top of that, the 25% ownership rule forces us to consider interests not just individually, but across various structures. A family member may hold interests directly or through trusts—revocable or otherwise. It’s a much more complex view of ownership than we’ve had to deal with before.
This shift requires us to be more diligent and precise in how we approach trust structures.
The Scope Has Expanded Dramatically
David Naples expresses the same sentiment, saying: "Now, all of a sudden, we're asked to gather that data for all our entities, and that's a much broader scope [...] These new guidelines call for a much more structured review of entities, requiring family offices to collect and organize information of a much wider range than ever before."
Leveraging Technology for Compliance
When it comes to managing all of this new data, technology is proving to be a game-changer. Family office leaders are recognizing just how beneficial platforms like iPaladin can be.
Melissa McNeill stresses this, noting, "I can't overstate this - iPaladin has been a game-changer for us in managing CTA compliance. It serves as a centralized hub, where we've digitized all of our entities and our trust and the relevant documentation."
By digitizing entity and trust information, iPaladin helped uncover previously forgotten or overlooked relationships that needed to be accounted for. This attention to detail is critical when approaching the new regulations to ensure that CTA reporting is thorough and that penalties are avoided.
A clear, reliable database has become essential for navigating CTA requirements effectively. This way everyone the team knows the data is accurate. iPaladin’s platform allows family offices to:
- Establish clear rules for who can change what information
- Create automatic quarterly workflows to verify data is current
- Keep all corresponding documentation in a central location
Taking Compliance Seriously
The stakes are high for navigating this process right. Family office leaders are expressing the importance of stressing this sentiment to team members, conveying that compliance is necessary and no detail should be overlooked.
As McNeill emphasizes, "I've had to explain the potential consequences of noncompliance which include significant fines and even potential criminal penalties to make it clear that the CTA is not something that we can afford to ignore."
These potential consequences are leading family offices to prioritize every detail through this process while making sure to treat compliance as their fiduciary responsibility.
Family Office Leaders: Your Next Steps
What we are hearing from iPaladin’s family office clients is clear: the CTA marks a new era of trust analysis and reporting. Fresh, more thorough approaches are necessary to ensure that no trust relationship is overlooked.
Whether it’s expanding analysis, implementing new technologies, or looking to outside resources, adapting to a new way of doing things is crucial. Family office leaders are focused on creating efficient processes that allow them to manage trust reporting meticulously to avoid any potential repercussions of noncompliance.
This new landscape offers family offices the chance to adapt and grow by determining the strategies that guarantee them optimal outcomes. Harnessing technology to create new solutions will set your practice apart.
Learn more about how iPaladin can optimize processes for your family office post CTA.
