IRA Trustee for non-marketable assets

[Guest Judy Miller]

A client is looking for a Trustee for an in-kind transfer from a qualified plan to an IRA. Assets include a mortgage. Anyone know trust company(ies) that will accept it?

Thanks.

[BeckyMiller]

Judy - go to www.google.com and search for "self-directed IRAs"

or "participant directed IRAs." The marketplace changes every time I seach for these guys. They will charge a fee and frequently have limits on the percentage of assets that can be non-traded, the size of the account, etc.

Your best bet, if you are in a smaller town is with your local bank trust department. They will charge a fee, but will frequently take almost anything that is legal.

Good luck!

[mbozek]

Odd assets such as mortgages, non publicaly traded stock and real estate are difficult to transfer to IRA custodians because of all of the legal entanglements that such assets bring to the custodian such as legal liability for negligence or environmental issues (RE), compliance with applicable securities laws (privately held stock), obligation to enforce payment provisions (mortgages) / default issues plus requirment that an annual valuation of asset be given to custodian to satisfy IRS requirements. Only large institutions such as JPMorgan- Chase who maintain specialized departments for IRA assets would be willing to take it and will charge big bucks to act as custodian. You could also try a discount broker such as Charles Schwab to see if they have a specialized dept but you will still pay for service. Real question is how much is invested in mortgage. Maybe your client should cash out interest in mortgage (even if at a discount) and rollover cash to IRA. Also how many payments left before Mortgage is paid off? If payoff will be made in a short time keep asset in plan until payoff occurs.