Season 2 Episode 54: Solo 401k Custodian Duties

ROYAL LEGAL SOLUTIONS

Learn how to free your time, protect your assets, and create lasting wealth with asset protection attorney and long-time real estate investor, Scott Royal Smith. When a close friend lost over $3 million in a single lawsuit, Scott decided to leave his litigation practice to help people protect themselves from frivolous lawsuits. His law firm, Royal Legal Solutions, now helps thousands of real estate investors and entrepreneurs protect more than $1.2 billion in assets. Join Scott as he deconstructs the lawsuit game and shows you how to protect yourself and your hard-earned wealth.

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MEET THE HOSTS

Scott Royal Smith, Esq., CEO, Real Estate Investor. As the founder of Royal Legal Solutions, I am an asset protection attorney and long-time real estate investor in every asset class in 10+ states. My background in litigation and investing uniquely has provided me with insights into how to best use the law for maximum legal advantage while streamlining operations, taxes, and compliance.

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KEY TAKEAWAYS

First, what is a custodian? Investopedia describes it as " ... a financial institution that holds customers' securities for safekeeping to prevent them from being stolen or lost. The custodian may hold stocks, bonds, or other assets in electronic or physical form on behalf of its customers."

In this session, Pete breaks down a few key differences between the Self-Directed IRA and the Solo 401k as they relate to custodian duties.

Tax code regulations dictate that if you are using an IRA, the custodian must be a 3rd party bank or trust company. This means that they control when, where, and how assets are invested. Pete explains that this reduced flexibility for investors makes the Solo 401k a beloved alternative.

So what's the difference? With a Solo 401k, you are your own plan administrator. You take on the role of the bank, trustee, or custodian, and the fiduciary responsibilities fall on you. With that, you have the freedom to invest your funds directly without having to work through a 3rd party custodian for a fee.

There are some caveats, though, such as being responsible for monthly, quarterly, and annual reporting. Along with keeping good records that document distributions.

Listen in as Pete and group members discuss how this retirement vehicle can be used to invest in various asset classes, including real estate to grow wealth with less hassle than an IRA.

Want a refresher or to see what you missed? Watch the replay.

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ENGAGE WITH US

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