Under the new reporting requirements effective March 1, 2026, certain residential property transfers to trusts are exempt from filing a FinCEN Real Estate Report.
The most common exemptions relevant to trust and estate attorneys include:
- Grantor to Own Revocable Trust: Transfers made by an individual grantor (either alone or with their spouse) to a trust of which that individual or their spouse are the settlors or grantors are generally not in scope, provided the transfer is for no consideration.
- Transfers Incident to Death: Reporting is not required for transfers occurring due to the death of an individual, whether governed by the terms of a will or trust, intestacy, surviving joint owners, or transfer-on-death (TOD) deeds.
- Legal and Court-Ordered Transfers: This includes transfers incident to divorce, transfers to a bankruptcy estate, or any transfer specifically ordered by a court.
- Specific Real Estate Transactions: Transfers of an easement only or transfers to a qualified 1031 intermediary are typically exempt.
- Regulated and Public Entities: Transfers to a governmental entity, a public trust, or other highly regulated entities (such as credit unions or insurance companies) do not require a report.
Key Indicators for Reporting If an exemption does not apply, a report is generally required if the transfer is non-financed (no mortgage from a regulated lender), involves residential property (1–4 family structures, condos, or co-ops), and the buyer is a legal entity or trust.
For reportable trusts, your firm must collect detailed identifying information for all beneficial owners, which includes all trustees, trust protectors, grantors who can revoke the trust, and beneficiaries who can demand distributions.