Rather than recreate the wheel, we found and wanted to share a flowchart created by selfdirectedira.org.
So, how does all this work?
1. We will set up your Self Directed IRA LLC in the state of your choice, prepare the Operating Agreement and obtain the EIN from the IRS.
2. You will need to transfer funds (IRA, 401K, or SEP-IRA) from your Current Custodian (if they do not allow truly Self Directed IRA’s)or 401K Plan Administrator to a New Custodian that allows truly Self Directed IRA investments. We are happy to provide you with information regarding an IRS approved custodian that allows truly self-directed IRA’s.
3. You will open a local bank account for the LLC at a local bank of your choice. We will provide you with the documentation (Articles of Organization, EIN, Operating Agreement) necessary to open the account.
4. You will then direct the Custodian to transfer your retirement funds to your new Self Directed IRA LLC bank account.
5. You will issue a membership certificate to the Custodian who will hold the membership interest on behalf of yourIRA. We will assist you with the preparation of the membership certificate. The LLC is owned by your IRA.
6. You as the Manager of the Self Directed IRA LLC will select a suitable Investment for your Self Directed IRA LLC.
7. You as Manager of the Self Directed IRA LLC write a check from the LLC bank account to purchase the investment.
8. The Investment is purchased in the name of your Self Directed IRA LLC. All income from the investment is paid to the LLC bank account. All expenses of the investment are paid from the LLC bank account
8. You as manager of the LLC have full control of the Self Directed IRA LLC funds and investments.
While this sounds straight-forward, there is specific language your Operating Agreement will need in order to operate and maintain both your liability shield and your tax benefits. Contact us today to discuss what we can do to help you build this.