FinCEN FAQ: Are Death or Divorce Transfers Reportable?

Do Real Estate ownership changes caused by death or divorce require FinCEN reporting?

FinCEN’s Residential Real Estate Reporting FAQs provide the answer in the list of transfers that do not require reporting.

• “A transfer resulting from the death of an individual, whether by will, trust, operation of law, or contractual provision.”
• “A transfer incident to divorce or dissolution of a marriage or civil union.”

FinCEN FAQ (E.3).

Even though these events involve a Deed and a change in Title, FinCEN lists them among transfers that do not require reporting when they fall within the exemptions above.

For reference, FinCEN defines a transfer of residential Real Estate as:

• “A transfer of residential real property is any sale, gift, or other transfer of an ownership interest in residential real property or a cooperative housing corporation evidenced by a Deed or other documentation of transfer.” FinCEN FAQ (E.2).

What This Means in Practice

Ownership changes caused by death or divorce are common events in Estate Planning and family transitions.

When Title changes because of death or divorce, the transfer may fall within FinCEN’s non-reportable exemptions.

For the full list of non-reportable transfers, refer to FinCEN FAQ section E.3.

After Escrow

FinCEN’s rule does not prohibit ownership changes caused by death or divorce. The rule defines when reporting requirements apply.

Even when a transfer is exempt from FinCEN reporting, the ownership change must still be documented and recorded correctly.

Changes in Title after death or divorce may require a properly recorded Deed or an Affidavit depending on the situation.

If you need assistance updating Title records after death or divorce, the Quick Claim USA team handles the post-closing documentation process so ownership is properly recorded.

Remember, when it comes to Real Estate Title, structure protects ownership. If it’s not recorded, it’s not protected.*

Your Concierge of Good Deeds

Footnote:

*In certain situations, a properly executed and delivered Deed may be legally valid between the parties even before recording. However, until it is recorded, the interest may remain vulnerable to later claims or competing recorded interests.

Disclaimer: QC Deed, LLC, dba Quick Claim USA, its members, and employees (Service Provider), are not attorneys in the State of Nevada, nor in any other State or jurisdiction. Service Provider is not licensed to give legal, tax or financial advice and may not accept fees for giving legal, tax, or financial advice. Refer to full disclaimer available on the website.