Most people know that there are limits as too what you can invest your IRA money into set by the federal government. However many people want to invest in a rental house instead of a traditional stock investment. You see an IRA itself can own property and many other types of nontraditional investments. It can also own promissory notes to gold, oil, gas, and cattle, private equity, and other types of investments. Self-directed IRA’s can even give out loans to companies. Just as important to note is that your IRA cannot buy stock in S corporations, collectables, or insurance.

However the major financial institutions that run IRA’s generally limit purchases to stock bonds and other traditional investments. As a result of this you’ll need the help of a Lawyer to make your IRA a self-directed IRA. These are relatively uncommon only making up 2 percent of all IRA’s. You will also need a lawyer to make sure you don’t break any of the IRA rules as they can get quite complicated and you don’t have the same protective barriers in a self-directed IRA as you do in a traditional IRA. If you aren’t careful you might run into trouble with the federal government but an estate planning attorney can insure that this doesn’t happen.

When running a self-directed IRA it’s important to avoid self-dealing. This is directly using any IRA funds to benefit yourself or you family members. If you do self-deal then you might have to pay taxes on the IRA and penalties. Instead you must have the IRA issue a check to a trustee then the trustee must issue the check to buy the property. Here at the Morton Law Firm we excel at making and understanding trust rules. Often times a lawyer can get around the traditional rules to accomplish your goals with your self-directed IRA.

The other main thing you need to worry about with self-directed IRA’s is scams. Often times if someone comes to you and suggests using a self-directed IRA for “a deal you can’t afford to pass up” it can be a scam. By going through your lawyer you can catch these scams and stop them in there track. If a self-directed IRA sounds like it might be beneficial to you or if you have any other estate planning needs call Certified Elder Law Attorney Ronald Morton at 601-925-9797 and make an appointment today.