WHY SHOULD I USE A SELF-DIRECTED IRA LLC WITH "CHECKBOOK CONTROL" INSTEAD OF A CUSTODIAN CONTROLLED SELF-DIRECTED IRA

Many IRA custodians advertise themselves as offering a Self Directed IRA, but what they are not telling you is that you will need to seek their consent before making an investment. To this end, the custodian will impose an annual fee based on the valuation of the IRA plus a per transaction fee. Whereas, in the case of a "truly" Self Directed IRA, a limited liability company ("LLC") is established that is owned by the IRA account and managed by the IRA account holder providing the IRA holder with "checkbook control" over his or her funds.

1. Custodian Controlled Self-Directed IRA Without "Checkbook Control"

With a custodian controlled Self-Directed IRA without "Checkbook Control", many types of nontraditional investments, such as real estate is generally permitted, however, the consent of the custodian is required in order to approve the transaction. This typically results in long delays and high custodian fees associated with the transaction. For example, before engaging in an IRA investment, you will be required to submit the transaction documents to the custodian for review and approval. receive the consent of the custodian. As a result, it is common to experience time delays as well as high annual fees as well as additional transaction fees. For example, it is common for a moderately active investor with $100,000 in assets with a Self Directed IRA custodian without checkbook control to end up paying from $700 to $1200 in aggregate annual fees (i.e. account value fee, transaction fees, approval letters).

In addition, there is no guarantee that the custodian will approve your investment even though the investment would not violate IRS rules. Overall, with a custodian controlled self-directed IRA, even though you will generally be permitted to make most non-traditional IRA investments, time delays and high custodian fees are the common characteristics of using a custodian controlled self-directed IRA.

2. Self-Directed IRA LLC with "Checkbook Control"

The Self Directed IRA LLC "Checkbook Control" Structure has been in use for over 30 years. With a "truly" Self Directed IRA LLC with "checkbook control", you will have total control over your IRA funds and you will no longer have to get each investment approved by the custodian. As a result all decisions are truly yours. When you find an investment that you want to make with your IRA funds, simply write a check or wire the funds straight from your Self Directed IRA LLC bank account to make the investment. A "truly" Self Directed IRA allows you to eliminate the delays associated with an IRA custodian, enabling you to act quickly when the right investment opportunity presents itself.

With a Self-Directed IRA LLC, a limited liability company ("LLC") is established that is owned by the IRA account and managed by the IRA account holder. The IRA Holder's IRA funds are then transferred by the Custodian to the LLC's bank account providing the IRA holder with "checkbook control" over his or her IRA funds.

With a Self Directed IRA LLC with "Checkbook Control", when you find an investment that you want to make with your IRA funds, simply write a check or wire the funds straight from your Self Directed IRA LLC bank account to make the investment.



Custodian Controlled Self-Directed IRA Without "Checkbook Control"

Self-Directed IRA LLC with "Checkbook Control"

Traditional investments options (stocks, mutual funds, etc.)

Yes

Yes

Nontraditional Investment options (i.e. real estate, precious metals, tax liens, etc)

Yes

Yes

Unlimited Investment Options

No

Yes

All Investments must be approved by the custodian

Yes

No

True "checkbook control"

No

Yes

Direct Access to your Retirement Funds

No

Yes

Limited Liability

No

Yes

High annual account fees

Yes

No

Transaction fees

Yes

No

Bankruptcy Protection of up to $1 million

Yes

Yes



For additional information on the IRA Financial Group, please contact us at 800-472-0646.