Frequently Asked Questions
Why is it beneficial to create a formal business structure when owning an expensive asset?
Creating a formal business structure, such as a self-directed IRA LLC, when owning an expensive asset can be highly beneficial for a number of reasons. Firstly, an IRA LLC provides the ability to purchase non-traditional assets. This is particularly useful when traditional IRA custodians limit certain investments, making it challenging to diversify your portfolio. Secondly, an IRA LLC offers checkbook control, giving the owner complete control over the funds of the IRA LLC. This allows for greater investment flexibility and ease in managing retirement assets. Thirdly, an IRA LLC provides limited liability protection. This means that the owners cannot be held personally liable for the business's debts, offering a layer of financial protection. Fourthly, an IRA LLC allows for the pooling of assets. This is especially beneficial when an expensive asset is desired but the funds are insufficient. Multiple investors can pool their funds to purchase the asset through the IRA LLC. Fifthly, an IRA LLC creates a formal business and managerial structure. This is crucial when multiple people own an expensive asset, as it helps to avoid potential legal issues that could arise between investors.
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