In a Self-Directed IRA, it’s very important how your assets are titled. If an asset is titled incorrectly, it could cause IRS problems and possibly lead to taxes and penalties. It’s important to remember that you do not own the assets in your IRA; your IRA owns them. All assets in your IRA should be titled to the correct owner, which would be "Sunwest Trust Custodian FBO your name IRA".

It’s also important to note that all documents pertaining to the purchase of any asset should be signed by Sunwest Trust on behalf of your IRA. For instance, if you are purchasing a piece of real estate, the title company will initially send Sunwest Trust a copy of the purchase agreement titled to "Sunwest Trust Custodian FBO your name IRA". When it comes time for the closing, the title company will send all of the closing docs to Sunwest Trust to sign on behalf of the IRA. The client or the title company will also need to give directions on how they would like the documents returned (i.e. overnight mail, regular mail, fax or email).

If you are using an IRA LLC, the rules are a little different. With an IRA LLC, all of your IRA funds will be held in a checking account set up for the LLC. Instead of taking title to the assets in the name of the IRA, you will take title in the name of the LLC. Since the IRA owns the LLC, the assets will still technically be owned by the IRA. The manager of your LLC will sign all documents pertaining to the purchase of an asset.

Please remember that Sunwest Trust does not provide legal or tax advice, nor do we sell or endorse any investment products. This blog is simply meant to provide general information to our clients and prospective clients.