The SDRASafeguard™ Service

Advice When You Need It

The last thing you want as an investor is an unwelcome surprise. You can assess the risk that an investment might not pan out, but with a self-directed retirement account (a “SDRA”), it’s easy to trip over the complex rules that apply without the right advice.
That’s what the SDRASafeguard™ Service is for!

Advice
Establish your self-directed investment venture with advice from independent advisors.

Compliance
Commit your self-directed venture to a formal compliance program, and secure an appropriate defense against IRS and creditor challenges.

Performance
Get the advice you need to integrate your self-directed retirement account investment strategy with your retirement, tax and estate planning strategies so they perform to achieve your goals.

Start with the Right Advice

Begin with the End in Mind!

The point of a self-directed retirement account is to invest for better returns in a tax-advantaged environment. There are special rules that apply here that don’t apply anywhere else, though, so it takes preparation with the right advice. Failing to consider all the rules, even by mistake, can lead to costly surprises.

  • Prohibited transactions can disqualify your account, expose you and others to surprise excise taxes, and subject your account to claims of creditors when it would otherwise be protected!
  • Investment in an entity that is taxed as a partnership can expose your account to unrelated business income taxes if the type of income earned by the venture isn’t exempt from the tax!
  • If your venture buys property with a loan, a portion of your account’s income can be taxable, even if it would otherwise be exempt!

Get the Right Advice!

Unless you’re an expert yourself, it’s important to get advice on self-directed retirement accounts from a qualified professional.

If you’re an individual entrepreneur investing alone or with relatives, our SDRAStartup Investor Services™ will take you from start to finish.

If you’re establishing a closely held business with a few other unrelated investors you know, you can get the service and expertise you need with our SDRAStartup Small Business Services™.

If you’re a venture organizer, structure your private offering correctly for your retirement account investors with our SDRAVenture Capital Services™.

Stay Out of Trouble

Prepare for the Unexpected Risks!
Once your self-directed retirement account venture is up and running the challenges of day to day business operations begin. That’s when what you don’t know CAN hurt you! Any business venture can encounter the unexpected, so it’s important to have the right advice available when you need it.

  • The building you bought in your self-directed IRA might be damaged by a storm. You can’t guarantee a loan to finance the repairs.
  • The business manager might want to retire. With your self-directed IRA as an investor, you have to be careful who takes his or her place, and how the choice is made.
  • If you have to travel to meetings for the business, how much of your expense can be reimbursed by the business?

Even if you are set up in compliance with all the rules, staying out of danger still can be a challenge without the right advice.

An Ounce of Prevention! The SDRASafeguard™ Service

Our SDRASafeguard™ Service provides that special resource you need to get the right advice and stay out of trouble:

  • Education. Our periodic SDRAFocus™ Webinars and SDRAFocus™ Guide will keep you up to date with new ideas, legal developments and important events so you can be well informed about the issues and “gray areas,” and know when to ask questions.
  • Access. Our FirstCall™ System gives you “on call” access to an attorney for advice by phone when questions arise. There’s no additional charge beyond what you are already paying for the Service. You’ll have an attorney on retainer as your guide.
  • Account Administration. Tired of using an “800” number to deal with your account custodian? We can handle that for you. With the right custodian, you can appoint us as your attorney-in-fact to deal directly with the custodian, so when you have a question, or when you want to make an investment or change your beneficiaries, you just call us. We’ll take care of it for you.

A Pound of Cure! – SDRACompliance Services™
If trouble does find you, or even if you’re worried about whether someone involved has unknowingly violated the rules, you need the advice of an experienced, knowledgeable attorney to help you minimize the damage, or even remedy the problem to avoid any damage.

  • Have a thorough review of your concerns by a knowledgeable attorney with SDRACompliance Review Services™.
  • Obtain the legal representation you need to defend you against challenges from the IRS creditors with our SDRACompliance Action Service™.

Consider the Rest of the Story

It’s always important to consider the “rest of the story.”

The Tip of the Iceberg

A self directed retirement account is only one of many financial, retirement, tax and estate planning strategies. Unless you integrate it with your other planning activities, it probably won’t perform as best it can, or even how you expect it to perform, and you and your family won’t get the maximum benefit without the right advice.

Here are just a few things to consider:

Seek Advice On Your Overall Portfolio Investment Policy

If you’re like most people, investing is a means to an end – saving enough money for retirement! In our experience, retirement plans and IRAs represent a sizable proportion of the liquid assets people reserve for later in life, even exceeding accumulations from after-tax investments in many cases. Nevertheless, your retirement accounts are only part of your total investment portfolio. Be sure to establish a long term investment policy that includes your self directed retirement account assets in the overall mix. Your investment policy statement is part of the “rest of the story.” Advice from a knowledgeable investment advisor is a key to your success.

The Supercharged IRA-Roth Conversion

If you’re thinking about converting your traditional IRA to a Roth, you’re probably thinking about how much income tax you’ll have to pay. That’s a big factor in deciding whether converting to a Roth is worth doing. Here’s where a the right advice and a self directed IRA provides a unique advantage you can’t find anywhere else – the “supercharged Roth conversion.”

Planning for Your Beneficiaries

It’s also important to consider how your retirement accounts might benefit the people you care about – your designated beneficiaries. Every retirement account has a beneficiary designation form. The right advice about how you use it can be as important to your beneficiaries as success or your investments!

Consider the “Stretch Out” IRA.

Wouldn’t it be nice if your beneficiaries could continue to save for their retirement with your retirement account? If you get the right advice and plan carefully, they can!

Minimum Distributions

For example, after you die, even if that’s before you retire, individual beneficiaries have to take out minimum amounts, called “minimum distributions,” from the account every your, but, although they can take out as much as they want (subject to taxation, of course), they are required to take out minimum distributions, and the amount is based on their remaining life expectancy (using IRS tables).

So, if the beneficiary is young, and has, say, a 60 year life expectancy this year, the minimum distribution is one-sixtieth of the account’s balance at the beginning of the year. That number is a very small percentage of the total account, so guess what happens? The account continues to grow, tax free (for a Roth) or tax deferred (for an IRA). The result can be a very sizable retirement account when the beneficiary reaches retirement age.

The Default Distribution Rule for All Others.

Suppose you forget to designate a beneficiary for your account. The “default rule” applies.

The default rule is that the account goes to your probate estate. But probate estates aren’t individual people, right? An estate can’t stretch out the distributions over anybody’s lifetime. The entire account has to be distributed within 5 years! If it’s a traditional IRA, that’s taxable money. Even if the estate distributes the money out to individual beneficiaries, there’s no way to get the “stretch out” treatment for them.

You need the right advice to avoid the 5 year rule.

Designating Trusts as Beneficiaries.

Have you ever thought about what happens to your retirement account if it’s inherited by your children? Sure, the “stretch IRA” is a great idea, but what if they just take it all at once, spend it and then don’t have enough money for the taxes? Or worse, what if the courts allow their creditors to get it?

Those are just a few of the many concerns that bring people to consider designating trusts as the beneficiaries of their IRAs. There are some hazards and pitfalls to avoid, but with the advice of a qualified, experienced professional you can preserve the “stretch out,” save taxes and protect your beneficiaries at the same time.

Read more about the key points of planning with retirement accounts here.

Careful estate planning should consider advice about how your beneficiary designations fit into your overall plan. Designating the beneficiaries of your retirement accounts, including your self directed retirement accounts, is an important part of your overall estate plan.