Understanding the Role of the IRA Custodian
The Role of the Custodian
All IRA plans are required to have a custodian.
Forge Trust Co.(FTC) acts as custodian for your IRA in the Checkbook IRA program created by Safeguard Advisors. Forge Trust acquired and re-branded IRA Services Trust Co. in August of 2020. Your plan was initially setup with IRA Services Trust Co.
The role of the custodian is to act as an interface between the IRA account holder and the IRA, and to perform the basic administration of the IRA as required by the tax code. This role involves:
- Holding the account
- Keeping track of account beneficiaries
- Performing annual reporting with IRS form 5498
- Reporting distributions from the IRA with IRS form 1099-R
- Receiving inbound funds via tax-year contribution or rollover/transfer from another retirement plan
- Issuing distributions to the plan account holder or other beneficiaries
- Issuing distributions for rollover/transfer to another retirement plan
- Executing and documenting the investments of the account as directed by the IRA account holder
- Providing statements to the IRA account holder
The administrative role of FTC is identical to that of any bank or brokerage acting as custodian for an IRA account. As a self-directed custodian, FTC has the staff training and paperwork processing capacity to document IRA investments into alternative assets.
In the case of a Checkbook IRA, the IRA is holding the ownership interest of a specially formed LLC entity or statutory trust entity created by Safeguard Advisors on your behalf. FTC documents the initial purchase of the entity from the IRA, then serves as the reporting layer and conduit for adding or removing capital from the entity in the future.
FTC is not involved in the actual plan investment activities that occur within the IRA-owned entity.
FTC has policies associated with operating your account that you should be familiar with. It is your responsibility to manage the IRA and your relationship with Forge Trust Co.
Relationship Between Safeguard Advisors and Forge Trust Co.
The role of Safeguard Advisors was to initially create the IRA-owned legal entity, and to provide ongoing consulting support for your operation of the program. These legal and advisory services are not offered by an IRA custodian such as Forge Trust Co. for regulatory reasons.
FTC is an entirely separate company utilized by Safeguard to serve in the role as custodian. There is no shared ownership or fee revenue between Safeguard and FTC.
During the setup of your plan Safeguard was named as an “Authorized Representative” on your FTC account. This allows FTC to share information about your account with Safeguard, which allows Safeguard to provide support integrating your Safeguard created legal entity with the underlying FTC account.
Safeguard Advisors never handles client funds and does not have a role in the processing of IRA-layer events such as contributions or distributions.
Forge Trust Co. Contact Information
Phone: 800-248-8447
Monday – Friday, 8:00am – 5:00pm Pacific time