Role of Self Directed IRA Custodian

A Self Directed IRA custodian enables individuals to invest retirement money into alternative assets, which are generally not available to them in a standard IRA.

Individuals seeking to diversify their retirement portfolios into real estate, private placements, promissory notes, etc., retain the services of a Self Directed IRA custodian to protect the tax-advantaged status of their investment.

As “passive” custodians, Self Directed IRA custodians do not provide any investment, tax or legal advice. Passive custodians act upon the instructions of investors after the investor has performed their own due diligence.  

Some of the responsibilities of a Self Directed IRA custodian include:

  • Maintaining IRA agreements and forms subject to the regulations of the IRS and the U.S. Department of Labor 
  • Accepting, documenting, and recording contributions, transfers and rollovers from other IRAs/retirement plans 
  • Executing accountholders’ investment instructions by sending funds from the IRA to the client selected investments  
  • Gathering, executing, and holding documents such as subscription agreements, operating agreements, offering documents, promissory notes, certificates, and other evidence of ownership by the IRA
  • Receiving and recording income from the assets held in the IRA
  • Executing accountholders’ instructions to sell, withdraw from or liquidate investments held in the IRA
  • Coordinating with investment sponsors the purchase and sale/liquidation of investments as directed by accountholders
  • Facilitating, as directed by the accountholder, distributions from the IRA to the accountholder or transfers to other IRAs or retirement plans 
  • Performing tax reporting of IRS Forms 1099-R and 5498 
  • Providing IRA statements to the accountholder which includes transactions and cash and assets held in the account 
  • Complying with all applicable State and/or Federal Regulations governing IRA custodians

Trust companies like Madison Trust are authorized to provide a wide range of custodial duties. Madison Trust has opted to focus on Self Directed IRAs exclusively. We have invested all of our resources into creating a seamless Self-Directed experience by providing clients with impeccable customer service and flawless transaction execution.

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