2. Preface
What is a self-directed IRA?
An industry term for an IRA that invests in non-traditional assets
such as Real Estate, Private Stock, Precious Metals, etc.
3. About The Entrust Group
Administrators for
self-directed retirement plans
Leader in our industry
• Over 30 years of service
• 14,000+ clients and nearly
$2 billion in investor assets
4. About The Entrust Group
Entrust is the premier provider of self-directed
retirement plans:
Knowledgeable staff
• All staff eligible have
earned CISP designation
Educators
• National CE Program
• National and local in-person
events and webinars
Local offices
5. Disclaimer
The Entrust Group ("Entrust") does not provide
investment advice or endorse any products.
All information and materials are for educational
purposes only. All parties are encouraged to consult
with their attorneys, accountants and financial advisors
before entering into any type of investment.
6. Investment Choices
Single family and multi-unit Trust deeds
homes Leveraged property
Apartments Precious metals
Condominiums Limited liability companies
Commercial property Limited partnerships
Developed & undeveloped land Unsecured/secured loans
Mortgages, lease/options Joint ventures
Foreign property Life settlements
7. Investment Restrictions
Prohibited Assets
Collectibles
• any work of art,
• any rug or antique,
• any metal* or gem,
• any stamp or coin*,
• any alcoholic beverage
Life Insurance
S Corps (S corporation tax laws prohibit IRAs to
invest in them.)
* Exceptions: Gold, Silver, Platinum & Palladium bullion of certain purity
8. Disqualified Persons
Your Spouse
Your Parents
Your Grandparents
Your Children
Your Grandchildren
Spouses of
Lineal Descendants
IRA Fiduciary
Certain family members cannot do business with your IRA.
9. Examples of Acceptable Transactions
Partnering with yourself on
a new deal
Partnering with your spouse on
a new deal
Partnering with your cousin
Leasing the property to your siblings
Remember the Self-Benefit Rule
10. IRA Purchase of Vacation Property
IRA purchases vacation property in Hawaii
• Purchase contract must be signed by Entrust and signed
“Read and Approved” by IRA holder
• Vesting must read “The Entrust Group Inc. FBO J. Smith IRA
account 12345”
• All rents/expenses flow into/out of the IRA
• Cannot stay there on holiday; cannot provide sweat equity
11. IRA Purchase of Rental Property
Rental property in Davis
• Daughter cannot rent from your IRA even at
fair value
• IRA can borrow funds to purchase real estate
• Percentage of net income attributable to the
loan may be subject to UBIT (Unrelated
Business Income Tax)
12. LLCs
With an LLC, the IRA account makes an investment in the LLC by
acquiring its member shares.
Advantages:
Affords “checkbook” control
Immediate access to funds
Ease of investing
Savings on check fees
Limited liability protection from claims
Disadvantages:
Cost to create
You maintain records
Single investment at inception
May be subject to State taxes and filings – check with your
financial or tax advisor
13. Business Trusts
With a business trust the IRA account makes an investment in the
business trust by acquiring its "beneficial interests."
Advantages:
Affords “checkbook” control
Immediate access to funds
Ease of investing
Savings on check fees
Greater privacy of information
Disadvantages:
Cost to create; more expensive than LLC
May be subject to State taxes and filings – check with your
financial advisor
14. Plan Types
Traditional IRA Other Special Plans:
Roth IRA Coverdell (ESA)
Individual (k) Health Savings Accounts (HSA)
SEP & SIMPLE
401(k) - Record keeping for defined benefit
plans that allow for alternative investing.
- Required plan documents (“Do your own”)
Funds from a Qualified Plan, including 401(k), 403(b), 457 plans can be
rolled into an IRA.
15. Getting Started is Easy
Three Easy Steps
1 2 3
Open an
Fund Your Purchase
Entrust
Account Your Asset
Account
16. The Next Steps
Take Action On Our Website
1 Sign up for a class or webinar Calendar of events
Schedule a meeting with an
2 Entrust representative
E-newsletter
Read about self-directed
3 retirement accounts
Due Diligence Info
4 Call our office Free Reports
FAQs
5 Join us on Facebook &
Twitter
17. Gary Kowalski
Director of Sales
555 12th Street, Suite 1250
Oakland, CA 94607
800-392-9653
www.TheEntrustGroup.com
Editor's Notes
During the intro slide the individual introduces himself and why he is presenting: Because we are educators,Because many people have not heard about SDIRAs and whyWhen you leave the room you will feel empowered to learn more to start investing in non-traditional assets with your IRA.
About The Entrust Group- Introduce our services. Let the audience know what it is we do. Take this opportunity to let the audience know that we are the leaders in education for our industry. what we do - Introduce our services
About The Entrust Group- Introduce ourselves. Take this opportunity to let the audience know that we are the leaders in our industry. We are the only ones in our industry that have local offices. Most of our staff is CISP. We provide ongoing education for our staff.Who we are- Introduce Entrust
It is mandatory that you read the disclaimer.
By using Entrust as the administrator for your account, you get much greater flexibility in the number of investment choices you have. You are not limited by the parameters set up by the custodian.
Although Internal Revenue Code 4975 lists very few investment restrictions, certain transactions (as opposed to investments) are prohibited.
The critical aspect in determining whether a transaction is prohibited is understanding who is considered a “disqualified person”. It is best to think of your IRA as a completely separate entity. Disqualified persons are a spouse, ascendants, and lineal descendants and any spouse of a lineal descendant as well as the IRA Fiduciary. Although brothers, sisters, aunts, uncles and step-children are not disqualified persons dealing with close family members could still be considered a prohibited transaction because of the indirect rule.
Partnering With Your IRA to Invest in Real Estate or any other type of investmentRule: You must be able to purchase the property outright without the use of your IRA funds. If you do not have enough personal funds and must partner with your IRA, this is considered “self dealing” because you personally benefit. Example:You would like to purchase property worth $100,000. You only have $50,000 total, including credit lines and cash, in the bank. You also have $50,000 in your IRA. You would not be able to make this purchase by partnering with your IRA because of the self benefit rule. Arms-Length TransactionsInvestments made with self-directed IRAs must be at arms length, which means that a willing buyer and willing seller are coming together with no undue influence from outside sources.Example: You want to sell your IRA investment property to a friend discounted 50% of fair-market value. You would not be able to make this sale because of the undue influence.
Partnering With Your IRA to Invest in Real Estate or any other type of investmentRule: You must be able to purchase the property outright without the use of your IRA funds. If you do not have enough personal funds and must partner with your IRA, this is considered “self dealing” because you personally benefit. Example:You would like to purchase property worth $100,000. You only have $50,000 total, including credit lines and cash, in the bank. You also have $50,000 in your IRA. You would not be able to make this purchase by partnering with your IRA because of the self benefit rule. Arms-Length TransactionsInvestments made with self-directed IRAs must be at arms length, which means that a willing buyer and willing seller are coming together with no undue influence from outside sources.Example: You want to sell your IRA investment property to a friend discounted 50% of fair-market value. You would not be able to make this sale because of the undue influence.
*Remind audience to consult legal or financial representative to learn more about prohibited investments within an IRA and structuring a business
*Remind audience to consult legal or financial representative to learn more about prohibited investments within an IRA and structuring a business
IRAs provide tax deferred retirement fund growth Let the audience know what types of plans can be self directed. Let them know that all types of IRA and qualified funds can be used……especially those old 401k funds that are still sitting with ex-employer plans. Whether you’re an individual or owner of a business, Entrust has a solution for you.Cover the tax benefits that these individual or business plans can offer. Tax advantages through tax deductible contributions and tax deferred earnings with the potential through the Roth accounts of tax free earnings.Discuss the difference between a Traditional account and a ROTH account. KEY DIFFERENCE IS: Traditional accounts you pay tax later not now – Roth accounts you pay now not later – CONTROL over taxes NOW vs. later. What will tax brackets be in 10, 15, 20 years?ROTH: If you do not need the tax deduction in the year that you are making your contribution, choose a Roth IRA because it is more flexible. At any time, you can withdraw your contributions. After you are 59½ and your Roth IRA has been open for five years, you can remove your earnings without penalty and without owing any taxes. And you aren’t required to take distributions at age 70½ or ever.SALES POINT: All types of plans can be self directed. If you have an old employer plan sitting around….move it to your Entrust account. Don’t forget to mentions those 401k plans that they have sitting around at old employers. Those can easily be rolled over to their Entrust account.
How to get started. Walk them through the easy steps of setting up an Entrust account, funding an Entrust account. Make sure they see that this process is very easy. Mention that they can always call or stop by the local office to complete the paperwork3 easy steps to getting startedStep 1: The first step is to complete the Entrust New Account Kit. This will establish your cash account with the bank. Step 2: Once your account is established, you will be set to fund your account. As, we mentioned earlier there are many ways to fund your new account. You may transfer funds from an existing IRA (in part or whole), you may roll funds over from a qualified plan…..or you may make you annual contribution to an IRA or an Individual(k).Step 3: Purchase your Asset. Locate and conduct due diligence on the asset
The Next Step-Let the audience know how they can learn more about self directed accounts. Let them know about your upcoming events. Let them know where they should go if they are looking for investment ideas. Mention: Make yourself a note to do 3 of the 5 things listed this week.
