Looking to gain more control over your retirement investments? An IRA LLC for checkbook control in your retirement account can be a powerful solution. Not only can you use this LLC to invest retirement funds in alternative assets—think real estate, private equity, etc.—but with checkbook control established, you can make the investments with the speed of a signature. There’s just one catch: you do need to create the LLC in the first place. And if you’re ready to do that, it helps to know what’s expected. Let’s explore the essential IRA LLC documents you’ll need to establish checkbook control.
Establishing Your IRA LLC
First, you’ll have to select a qualified custodian—a custodian that specializes in Self-Directed IRAs and checkbook control. Not all custodians offer the option for checkbook control, after all. So it’s essential to select one that understands the unique requirements of this arrangement and is willing to handle the initial setup.
Once you’ve done that, you’re ready for the next steps: thinking about the actual paperwork. Don’t feel overwhelmed here. Your custodian can help you with the initial LLC setup so it doesn’t feel like a whirlwind.
There are a few steps when it comes time to establish the IRA LLC:
- You’ll have to choose a name for your LLC, which means the LLC’s name needs to comply with your state’s regulations. Remember, you’re registering the LLC with the state—and each state has its own quirks and rules that you have to abide by to get your LLC.
- You’ll have to file Articles of Organization for this entity, which means filing a document that will officially register the LLC as a legal entity in your state. For federal tax purposes, Single Member LLCs can be pass-through accounts that are quite simple.
- The LLC will need to be owned by your IRA. This ensures that the retirement assets within the LLC will be the correct assets, designated for retirement and not giving you any immediate personal benefit. If you were to use the LLC to invest in things that might benefit you immediately, you could risk having heavy fees and penalties from the IRS.
You’ll also need one final element that’s worth singling out: the LLC Operating Agreement.
The LLC Operating Agreement for an IRA LLC
This legally binding document outlines the management structure of the LLC, the rules for its operation, and the IRA’s ownership of the LLC. It will establish key facts about your LLC, such as who owns the LLC, serving as the Single Member. It will designate manager authority and outline how the LLC will work for investing purposes. And with this Operating Agreement, you will have an essential LLC document.
But let’s follow up on that. What documents do you need in place when it’s time to open a checking account on behalf of the LLC? There are a few that are key here:
- Articles of Organization
- LLC Operating Agreement
- The IRS-issued EIN (employer identification number) for the LLC
With these in line, you’re now able to open the LLC’s checking account. This account is within the LLC, which is within the IRA—thus giving you what you need to make flexible investments as we laid out here.
Sound like a lot? It’s not as intimidating as it seems. But if you reach out to us here at TurnKey IRA, we’ll be eager to help simplify the process even further. You can continue here on our website or reach out to us by dialing 844-8876-IRA (472) today. We’ll be glad to talk you through it.
