UPDATE TO BLOG: It is important to note that the FinCEN reporting rules are in a state of fluctuation as various court rulings have put into question the legality of such requirements. On March 19, 2026, the U.S. District Court for the Eastern District of Texas vacated the FinCEN’s real estate reporting rule as exceeding the agency’s statutory authority under the Bank Secrecy Act. The court ruled that cash real estate transfers to entities and trusts are not categorically “suspicious” under the Bank Secrecy Act. What Does This Mean? Currently, the below reporting rule is no longer required. A potential appeal by the U.S. Government could reverse this decision.
The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has introduced new reporting requirements that will impact certain residential real estate transactions involving legal entities and trusts, including revocable living trusts.
These stated purpose behind these rules is to increase transparency in the real estate market and help prevent money laundering through anonymous property ownership.
When Do the New Rules Take Effect?
On March 1, 2026, certain transfers of residential real estate must be reported to FinCEN by professionals involved in the closing process.
Which Transactions Are Covered?
A transaction will only require reporting if all of the following conditions are met:
- The property is residential real estate
- The transfer is made without financing (such as an all-cash purchase or gift)
- The property is transferred to a legal entity or trust (for example, an LLC or certain trusts)
- The transfer does not fall under an exception
What Types of Property Are Included?
The rule applies to residential real estate, which generally includes:
- Single-family homes
- Condominiums and townhomes
- Small multi-family properties
Important Exceptions
Many common real estate transactions are not subject to reporting.
For example, reporting is generally not required when:
- The buyer is an individual (not an entity or trust)
- The purchase is financed through a mortgage or lender
- The transfer occurs due to death, divorce, or bankruptcy
How Does This Impact Revocable Trusts?
Revocable living trusts are commonly used in estate planning to hold title to real estate and avoid probate.
Under the new rule, a transfer of property into a trust may trigger reporting if it meets all of the criteria above, particularly if:
- The transfer is all-cash, and
- The trust qualifies as a reportable entity under the rule
While revocable trusts remain an effective estate planning tool, these rules reduce the ability to use trusts or entities for anonymous real estate ownership in certain transactions.
Who Is Responsible for Reporting?
The responsibility to file the report does not fall on the buyer or property owner.
Instead, FinCEN requires real estate professionals involved in the closing process to report the transaction. This may include:
- Settlement or closing agents
- Title companies
- Escrow professionals
However, although the homebuyer is not required to report, the real estate professional will likely need the homebuyer’s involvement in providing necessary details.
What This Means for You
For most homeowners and families using revocable trusts as part of their estate plan, the impact will be limited.
However, you may encounter additional reporting requirements if:
- You purchase residential property without financing, and
- You take title in the name of a trust or legal entity
Understanding these rules ahead of time can help avoid delays or surprises during the closing process.
Planning Ahead
If you currently own real estate in a trust—or plan to purchase property through a trust or LLC—it is important to ensure your strategy aligns with these new federal requirements.