QUESTION: I read that an IRA can establish a trust with checking thus bypassing the LLC IRA arrangement. True or false?
ANSWER: I know that in the last year or so certain IRA facilitators have been promoting the trust concept whereby the self-directed IRA invests in a trust and thus is the sole member of the trust. However, the trust concept has not been tested by the regulations like the self-directed IRA LLC has. In other words, I don’t know of any court cases that address a trust can be 100% owned by an IRA. On the other hand, the Swanson Court case supports the IRA LLC arrangement but not the trust arrangement.
Thanks,
Rick in CA
