Professional Services

Self-Directed IRA - Legal Guidance

We take pride that we are one of only a handful of law firms that specialize in providing legal advice, guidance, and services to clients who want to establish or who currently have a self-directed retirement account. Given the importance of your hard-earned retirement assets, it is critical to have as your professional legal advisor someone who understands the breadth and complexity of the tax and regulatory requirements that apply to self-directed retirement accounts.

What Is A Self-Directed IRA or Retirement Account

A self directed retirement account, unlike a regular retirement account, is one in which the owner of the account (or someone appointed by the owner) makes all the investment choices and decisions for the account. While many brokerage firms and banks offer self-directed accounts, the accounts for which we service our clients are ones in which the client wants to make investments in private, non-publicly traded investments (commonly referred to as "alternative" investments) such as;

  • Purchasing real estate (a single family residence, commercial office building, residential rental building, etc)
  • Purchasing a privately-held business
  • Purchase a franchise
  • Mortgages
  • Secured notes (the IRA can make private loans to persons who are not disqualified)
  • Tax liens

Because these types of investments are not publicly traded, the IRA owner is responsible for ensuring compliance with all the applicable laws and regulations, and in most cases the owner will benefit greatly from legal advice and services for establishing and operating the retirement account and investment vehicle (such as a LLC).

What Type Of Retirement Accounts Can Be Used

Retirement accounts through which the self-directed investments can be made include;

  • IRAs (both traditional and Roth)
  • SEP IRAs
  • Solo 401(k)s.

Steps for Establishing a Self-Directed Retirement Account

  • Select a self-directed IRA custodian that will manage "nonpublic" investments by the retirement account.
  • Establish a retirement account that can hold the "nonpublic" or "alternative" investments. This can be an IRA, SEP IRA or solo 401(k).
  • Fund the self-directed account. This can be accomplished by a rollover from your existing retirement plan to you directly and then a transfer by you to the new self-directed custodian or a direct transfer from the existing retirement plan to new custodian (called a trustee to trustee transfer). Note: You can make annual contributions to you self-directed account after the initial funding.
  • Determine if a LLC or other entity will be used, and if so establish that entity.
  • Purchase the new investment: (e.g.,. Real estate, franchise, business, mortgage) in the name of the new self-directed IRA LLC

Benefits Of A Self-Directed Retirement Account

  • You have total control over choice of investments.
  • Potential to achieve higher returns from investment.
  • Ability to diversity portfolio beyond the volatile stock market.
  • Clients can use retirement funds rather than borrowing to invest in a business without having to take a "taxable" distribution from their existing plan.
  • Many clients prefer assets that are tangible and have limited downside potential such as real estate (stocks theoretically can decline to zero value).
  • Many clients currently feel that real estate offers the best opportunity for upside appreciation.

Services We Offer

We offer the following full range of services to our self -directed clients. You can start and end the entire process with us. We will manage the entire the entire process for you. You do not need to have an attorney referred to you (many companies offering self-directed LLC preparation services have to refer their customers to an outside attorney) by a LLC preparation company. Services offered include:

  • Which Plan is Best: Determine which self-directed retirement plan account is best suited for your desired investment and establish the plan for you. In some cases a self-directed IRA is best, in some cases a solo 401(k) is best.
  • Choose a Custodian for Your Self-Directed Account.
  • Fund the Self-Directed Account. We will advise you to ensure that you are not taxable on the funding or do not violate the prohibited transactions rules.
  • Establish the LLC: There are many benefits to properly using a LLC to purchase and hold your investments. It is critical that the establishment and operation of the LLC be done correctly.
  • Review or Draft Legal Contracts. We can prepare or review legal contracts such as lease agreement, purchase and sale contracts, and employment contracts.
  • Obtain Financing. We can help you obtain financing (for example you can obtain nonrecourse loans to purchase real estate in your self-directed IRA- this currently may be easier to obtain then conventional financing).
  • Tax Filings. Prepare any required fax filings.
  • Advisory Opinion. For particularly sophisticated or complex transactions, we can prepare a letter requesting an advisory opinion from the IRS or Labor Department to ascertain whether the transaction will be in compliance with the relevant tax and/or labor laws.
  • Legal Advisor. Serve as your ongoing legal advisor for all transactions involving your self-directed retirement account and any established LLC for the account.


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