IRA LLC vs. IRA Trust

A new concept is available to IRA account owners who are interested in self-directing their IRA accounts. Self-direction gives one the ability to invest into both traditional (e.g., mutual funds) and non-traditional (e.g., real estate) all from one account.  It is the IRA Trust.

Is the IRA Trust substantially different that the IRA LLC to the consumer (you)?  Not really.  And, while there can be some very minor disadvantages to the Trust, the majority of individuals will never see any tangible differences in how the IRA Trust is administered in relationship to the IRA LLC.

So, Why Use the Trust?

Trusts are not registered with your State’s Secretary of State.  As a result, your Trust has no initial establishment fees with the State (as there is no LLC), nor does it have any annual filing fee requirements!

Now, you may reside in a state with a very low establishment cost to you, and a very low annual fee….heck, you may even be in a State that has no annual filing fees required of your LLC.  If this is your situation, the IRA Trust may not be of strong consideration.   However, some States have fees that are very expensive that can range upwards to $800, per year.    In addition, many of these same States have expensive penalties if you do not form the LLC in their State…and they are actively trying to find individuals who reside in their State who do not file for the LLC (any LLC) in that State.  Some States with hefty fees:

State of California — Relatively inexpensive establishment fee; very expensive, annual LLC tax;

State of Massachusetts — Very expensive establishment fee; equally expensive, annual LLC tax;

State of Maryland — Very expensive establishment fee; equally expensive, annual LLC tax;

State of Illinois — Very expensive establishment fee

Your Options?

PGI does not establish the IRA Trust but has partnered with Frank Selden of Frank Selden Law.   Please feel free to read his post on the IRA Trust.  Through this relationship, you have the following benefits:

  1.  A professional fee that is being provided at a discounted structure for PGI clients only;
  2. An IRA Trust that can be established for new and current PGI clients who deem the benefits of the Trust to be of value.  Individuals in the States referenced should strongly consider a conversation on this topic.
  3. An IRA Trust where you have a client/attorney relationship.  A relationship with a professional who is an attorney, has extremely strong knowledge in this arena, and will defend the Trust document’s purpose as an alternative to the IRA LLC.

It goes without saying you want your IRA Trust established correctly.  PGI is aware of only two law firms in this space, and it has full confidence and trust in Frank Selden Law.  If you are interested in learning more about the Trust, please contact PGI.    If you have continued interest, PGI will refer you to Frank Selden for a thorough conversation, so you can determine if the IRA Trust is the option you should pursue.

As always, the information provided is intended to be educational in nature.  It is not intended, and should not be considered, tax, legal, financial or investment advice.  Always consult with your respective professional in all such matters.