Imagine you’re a retirement investor with some funds in a retirement account. You spot an alternative investment you like—say, a piece of land that you believe has potential—and need to make a quick move. If you have a Self-Directed IRA, you know that you can issue a buy order to a custodian and potentially have that land in your retirement account…eventually. But what if you need to move more quickly? Then it may be time to think about using checkbook control within an IRA by using an LLC. Here’s what you’ll need to know.

What is a Checkbook Control LLC?

A Checkbook Control LLC is the nickname for a legal structure allowing Self-Directed IRA owners to establish a limited liability company (LLC) within their IRA. Once the LLC is set up and funded by the IRA, you, the account holder, essentially become the manager of the LLC. You’ll now have “checkbook control,” meaning you can directly write checks to invest in a wide range of assets without needing custodian approval for each transaction. Think of it as a faster way to invest under the umbrella of retirement investing.

Benefits of Checkbook Control LLCs

One of the biggest advantages of a Checkbook Control LLC is the speed at which you can make investment decisions. You can make investments with the speed of a check. Traditional Self-Directed IRAs typically require custodian approval for each investment, which can be time-consuming. With checkbook control, you eliminate the extra paperwork. Whether you’re closing on a real estate deal, bidding at an auction, or investing in a time-sensitive opportunity, you’ll have quicker access to your retirement funds.

Additionally, a Checkbook Control LLC is flexible. You can go beyond stocks, bonds, and mutual funds. Investors can diversify portfolios by acquiring real estate, precious metals, private equity, tax liens, and more. With direct control over your funds thanks to self-direction, you’ll have a wider horizon of potential wealth-building assets to choose from.

And with a Checkbook Control LLC, you minimize the number of transactions that require custodian involvement. This is nice, because it means you can reduce custodian fees. Instead of paying fees for each investment or withdrawal, you handle transactions directly through your LLC’s bank account, lowering the overall cost of managing your investments.

Oh, and one final benefit to think about: a Checkbook Control LLC can offer an additional layer of privacy. Since the LLC, not the IRA, is making the investments, your name might not be part of the public records. This can be especially beneficial for real estate investors or those who want to keep their financial activities private.

What You Need to Remember About Checkbook Control LLCs

While a Checkbook Control LLC offers significant advantages, you’ll still need to know the rules and responsibilities that come with it. The IRS has strict guidelines about what is and isn’t allowed within a Self-Directed IRA. For example, certain transactions involving disqualified persons (like yourself, your spouse, or other close relatives) will be prohibited. Taking part of these prohibited transactions can result in severe penalties. It can even mean the disqualification of your IRA.

But what if you want to know more about how Checkbook Control works, what Checkbook Control LLCs can mean for your bank account, and what comes next for you and your retirement plans? It’s time to start exploring this avenue of retirement investing. And that means asking questions. We recommend you reach out to us here at American IRA to find the answers to those questions—simply dial us at 866-7500-IRA today.