Self Directing Your Retirement Plan: Recent Comments

Comment on Frequently Asked Questions: Real Estate Purchase in an IRA

2009-08-11T18:07:47Z

THought the article was good and would like to be kept abreast of any changes or rulings in this area. I am a commercial / industrial real estate broker. Thank you.

Comment on Did You Know You Can Buy Bank Owned REO Investment Properties in your IRA?

2009-05-27T14:19:17Z

It is good, Lance, that you are getting the word out on these investments. Banks and captive financial planners refrain from telling their customers about these opportunities.

Comment on Potential Advantages of 401(k) Plans for Sole Practitioners and Sole Proprietors

2009-04-09T15:49:37Z

Regarding antialienation and Individual 401(k) plans:

You ask a very good question and the answer is somewhat unclear. Since I am not a legal or tax professional, I can only offer my observations and opinions and you should seek the advice of a professional before making a purchase decision based on the representation of anyone who will make a commission when you decide to buy based on their representation.

Basically the sponsors of many self directed 401 (k) plans say that their plan offers the same protections as a corporate type 401 (k) with full time employees. The usual caveat for these Solo or Individual K plans is that the plan sponsor should not have any employees that work more than 1000 hours per year. In researching the answer to your question, I think that those sponsors oversimplify their position and that these types of plans do not enjoy protection through what is called "antialienation" (sometimes described as an "O.J. Clause" because footbal star O.J. Simpson was able to keep the assets in his Qualified Pension Plan from the NFL in spite of Civil Suits related to the death of his ex-wife. I found a reference on about antialienation and include it here: http://www.petershannonco.com/timely_tax_topics2.htm. Before you decide to buy any 401 (k) designed for a sole proprietorship or husband and wife business because the seller says you have the same asset protection as offered for fully qualified plans governed by ERISA, check with a professional regarding this issue.

One source for a plan of this type is at www.cencal.entrust.com. The position of this plan administrator is that an Individual K does not qualify for ERISA protection. Your tax or legal professional can contact them for more information and there are strategies for reducing exposure to litigation in your IRA based on what state you live in.

I would love to have more comments from you in the future and invite good questions like yours to my blog, but please include a valid email address in the future.

Comment on What to do with your Pension when you Change Jobs

2009-01-07T09:17:25Z

First of all congratulation for such a great site. I will keep visiting this blog very often.

Rose.

Comment on Potential Advantages of 401(k) Plans for Sole Practitioners and Sole Proprietors

2008-12-01T00:59:09Z

Do the ERISA antialienation benefits for a typical 401(k) plan extend to a Solo 401(k)?

Comment on What is "Checkbook Control"?

2008-07-06T06:18:16Z

Thom,

Since these types of offerings cannot generally be advertised they are marketed between people with a prior business relationship or by word of mouth. Depending on the type, an offering may be limited as to the number and financial status of investors that can be involved. Private Placements of Equities involve considerable risk of loss of principal and should be reviewed carefully by the appropriate legal and tax counsel before your invest IRA funds. I will be writing an entry on the topic in the next month or so.

Comment on What is "Checkbook Control"?

2008-07-02T21:18:34Z

Lance-
Thanx for your clarity regarding checkbook control. I am presently researching several potential investments in my SDIRA and have found private placements( under Regulation D) as potentially excellent opportunities. I know that many custodians resist these types of investments. Checkbook control is the best way to obviate that problem. I am looking to find/network private placement investments and was wondering if you know the best resource to do this? I love the fact that they often provide both a secured return AND an equity position.