For years, all-cash home purchases made through limited liability companies and trusts sat in a blind spot in America’s anti-money-laundering rules. FinCEN, the Treasury’s Financial Crimes Enforcement Network, wrote a Residential Real Estate Rule to close it. The rule took effect on 1 March 2026. Eighteen days later a federal district court in Texas vacated it, holding that FinCEN had exceeded its authority under the Bank Secrecy Act. FinCEN appealed to the Fifth Circuit, where the case is still pending. Other federal courts have reached the opposite conclusion.
So where does that leave you if you are buying Hawaii property through an entity or a trust?
In this video I walk through what the rule required, why it was struck down, what FinCEN’s current guidance says about filing, and — more usefully — what none of this changes.
The short version: no filing is required today, the appeal is pending, and there is a real possibility the rule returns on short notice. Do not build a plan on the assumption it is gone for good. And remember that a structure chosen only for privacy can be expensive in every other dimension — property tax classification and exemptions, HARPTA and FIRPTA withholding, financing, insurability, estate planning, title. Privacy structures are legal architecture, not invisibility cloaks.
I’m Jason Wong, Principal Broker of Island Dragonfly LLC, working across all six Hawaiian islands — Oʻahu, Maui, Hawaiʻi Island, Kauaʻi, Molokaʻi and Lānaʻi. My practice is built around buyers and sellers who value discretion: international investors, family offices and trustee boards, U.S. expats, and local owners of significant property. I work in English and Cantonese, and the transaction teams I assemble treat confidentiality as a service standard rather than a favour.
If you are weighing an entity or trust purchase in Hawaii, or you want a second read on a structure someone has already proposed, I’m glad to talk it through before you are under contract — that is when it is cheap to change.
Contact Jason Wong (PB), MBA — President & Principal Broker, Island Dragonfly LLC
Personal site: https://jasonwong.us
Brokerage: https://islanddragonfly.com
General information, not legal or tax advice. Confirm the current status with your attorney and escrow officer before you close. Island Dragonfly LLC, RB-22819 / RB-24348. Equal Housing Opportunity.
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