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Self Directed IRA

A Cartoon house that might need a Texas Transfer on Death Deed

Self Directed IRA Attorney – Houston

Why do you need an attorney for your self directed IRA?

Often, as experienced estate planning attorneys in Houston, our clients consult us about buying or acquiring assets through a self-directed IRA account. And to become a good steward of your property and to protect your family, you must seek advice from a wills, trusts, and Houston estate planning attorney and consider creating a comprehensive estate plan. By planning ahead of time in using the estate’s wills and trusts, you can protect your children and spouse from litigation, estate taxes, and foster care if you have small children.

Schedule your free consultation now with certified wills, trusts, estate planning, and probate attorney in Houston, Texas, to discuss a comprehensive plan tailored to protect your assets and your family. At the Law Office of Troy M. Moore, PLLC, we understand that everyone has different needs. Some may need a simple will, an irrevocable life insurance trust (ILIT), a revocable living trust, financial, or medical power of attorney. Still, you need a qualified estate planning lawyer for your legal matters and asset protection. Our attorney at law is confident to be able to address and assess your needs.  A Self-Directed IRA may be an attractive solution to manage your own retirement assets so that you can outperform the stock market, usually in real estate deals.

As our clients sign their Documents for Estate Planning, they tell us that they feel a great sense of achievement, realizing that they have taken the right steps to protect their families.

  • Do not let the State of Texas dictate where your assets go.
  • Prevent unwanted guardianships
  • Proper estate planning dramatically decreases the burden on your family.
  • Plan who will take care of your children
  • Simple or Complex Wills
  • Supplemental/Special Needs Trusts
  • Powers of Attorney
  • Living Wills
  • Self-Directed IRAs

Here is a brief overview of how a self-directed IRA works:

What Is A Self-Directed IRA Account

Self-Directed Individual Retirement Accounts (IRA) are similar to traditional IRAs structured to enable investments to grow tax-free and tax-deferred over time. Self-directed IRAs, however, grant people to make alternative investments. The different investment options feasible for a self-directed IRA exceed traditional IRA accounts’ investment options.

Unlike a regular retirement account, a self-directed retirement account is one in which the account owner (or someone named by the owner) makes all of the account’s investment choices and decisions. While many brokerage banks and firms offer self-directed accounts, the accounts for which our law office represents are those in which the client wants to invest in private, non-publicly traded securities (commonly referred to as “alternative” investments) such as;

  • Purchasing real estate (a commercial office building, single-family residences, residential rental building, etc.)
  • Tax liens
  • Buying a private business
  • Mortgages
  • Secured notes
  • Purchasing a franchise

Because these kinds of investments are not traded publicly, the IRA owner is responsible for maintaining compliance with all relevant laws and regulations. In most situations, the owner will significantly benefit from services and legal advice to set up and manage the retirement account or investment vehicle (such as an LLC).

You may have expanded investment options with a self-directed individual retirement account (IRA) that goes beyond investing in shares, bonds, mutual funds, and other forms of conventional investments.

A self-directed IRA gives you the opportunity and flexibility to choose how to invest your savings. You can invest not only in the stock market, but also in a wide range of other asset categories, such as notes, mortgages, real estate, estate taxes, precious metals, and private placements. It ensures that you can spend your IRA assets in investments, such as real estate, that you know and are comfortable with.

The phrase “self-directed” essentially means you have control over where and how to direct your IRA investments as the account owner. With this IRA account, you can buy real estate, do business planning, joint partnerships, gold, commercial paper, commodities, and many other assets, not just in stock or bond market-related instruments.

Benefits of a Self-Directed Individual Retirement Account

  • You have complete control over investment choices.
  • Potential for higher investment returns.
  • Quality of portfolio with variety beyond the volatile stock market
  • Customers can use retirement funds instead of borrowing to invest in a business organization without having to take from their existing plan a “taxable” payout.
  • Many clients personally prefer tangible assets with limited downside potential, such as real estate.
  • The majority of clients feel that the best way for upside appreciation is through real estate law.

How Will I Be Able to Set Up A Self-Directed IRA Account?

Setting up a self-directed IRA account involves many steps:
  • The account has to be set up and funded. Like any IRA account, you have to sign up with an investment firm or broker for the account. The IRS allows a manager of an LLC to retain self-directed IRAs on behalf of the IRA owner. Once you have signed up with a custodian or trustee, you will need to fund initial capital to the account so you can make investments with your own self-directed IRA account. With new money or a transfer from an existing IRA account, the self-directed IRA account can now be funded.
  • Choose an opportunity to invest. You can choose the investment opportunity in which you would want your self-directed IRA funds to go. Many different assets can be used to invest in self-directed IRAs, but there are also specific assets that cannot be invested explicitly in using a self-directed IRA.
  • Request that the funds be made available for the purchase of the investment from your self-directed IRA. You may demand that your self-directed IRA funds should be made available to buy your preferred asset by consulting with your self-directed IRA custodian or trustee. The custodian or trustee will handle the transaction for you.
  • Manage the investments in your self-directed IRA. Once again, you can sell or manage your self-directed IRA investments by working with your self-directed IRA trustee or custodian. To comply with the regulations of the IRS, all transactions and payments must be carried out through your self-directed IRA.

What Will I Own in My Self-Directed IRA Account?

Self-directed IRAs may include options for investment such as:

  • Real estate;
  • Bonds;
  • Tax liens;
  • CDs;
  • Intellectual property;
  • Mutual funds;
  • Precious metals;
  • Promissory notes;
  • Private mortgages;
  • Mutual funds; and
  • Private businesses

Some types of assets are not allowed to invest with a self-directed IRA. Under IRS Code 408(m), proscribed investments include investment in collectibles such as gems, art, stamps, specific types of coins and metals, alcoholic beverages, and other tangible personal properties.  As your self-directed IRA attorney in Texas, we can help with advising you on such matters.

IRA Investments You Can’t Make

Some types of investments are not allowed within a self-directed IRA. These include life insurance, collectibles (with some coin and metal exceptions), and S Corporations.  See Publication 590-A from the IRS for more information.

Illegal transactions

It is prohibited to use your IRA account for the following payments or purchases:

  • Lend money from the IRA account for your own use
  • Exchange, sell or lease property which you already own to your IRA
  • Transfer IRA assets or income to ineligible persons
  • Extend IRA credit or lend IRA money to ineligible persons
  • Provide disqualified persons with goods, services or facilities
  • Enable fiduciaries to receive or use the income or assets of the IRA for their use or interest

Services We Offer at the Law Office of Troy M. Moore, PLLC

With the help of our Texas law attorney, we, as your self-directed IRA attorney, will manage the whole probate process providing comprehensive legal representation under law and estate planning. You can start and finish the entire process with us. We offer our self-directed customers the following full range of services.

Services offered include:

  • Which Plan is the Best – Our law firm will decide which self-directed retirement plan account is best suited to your desired investment and will create a plan for you. In some situations, it is best to have a self-directed IRA and have a solo 401(k).
  • Choose a Trustee or Custodian for Your Self-Directed IRA Account.
  • Fund and support the Self-Directed Account – We will be providing legal advice to make sure that you do not tax on the funding, or you do not breach the rules on illegal transactions.
  • Establish the LLC – There are many advantages to purchasing and holding your investments properly using an LLC. The LLC must be properly established and operated.
  • Review or Draft Legal Contracts – We can arrange or review legal contracts such as contracts for lease agreements, sale and purchase, and arrangements for employment.
  • Obtain Financing – We can help you obtain and secure funding.
  • Tax Filings – Prepare and arrange any tax filings that are required.
  • Advisory Opinion – We may prepare a letter requesting an advisory opinion from the Labor Department or IRS for specifically complex business transactions to determine whether the purchase must comply with the relevant tax and labor laws.
  • Legal Advisor – For all transactions involving your self-directed IRA account and any defined LLC account, our certified estate planning lawyer at The Law Office of Troy M. Moore, PLLC, provides legal advice as your most-trusted legal advisor and self-directed IRA attorney.

Legal and Tax Advisor

Using your self-directed IRA account to acquire alternative investments involves a lot of risks and traps, so you need to get proper advice from your tax and legal advisor before you begin this plan. Fees, interest, and penalties could cost you when making the wrong move. The above article only covers a few of the necessary requirements and provides legal information but not legal advice.

Troy M. Moore is an exceptional estate planning attorney serving Houston, TX, and has been representing clients for over 20 years. As your self-directed IRA lawyer, we will draft the specific LLC operating agreement necessary for such transactions, so that your LLC entity remains in compliance from a formation standpoint with the IRS. For a free initial consultation, feel free to contact our law office at 281-970-8039.

Contact Us

Troy M. Moore’s law firm, PLLC, opens at 8:30 a.m. to 5:00 p.m., and we provide a free phone consultation to all prospective clients.