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Understanding the Role of the IRA Custodian

The Role of the Custodian

All IRA plans are required to have a custodian.

IRA Services Trust Co.(ISTC) acts as custodian for your IRA in the Checkbook IRA program created by Safeguard Advisors.

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 ISTC is identical to that of any bank or brokerage acting as custodian for an IRA account.  As a self-directed custodian, ISTC 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.  ISTC 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.

ISTC is not involved in the actual plan investment activities that occur within the IRA-owned entity.

ISTC 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 IRA Services Trust Co.

Relationship Between Safeguard Advisors and IRA Services 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 IRA Services Trust Co. for regulatory reasons.

ISTC 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 ISTC.

During the setup of your plan Safeguard was named as an “Authorized Representative” on your ISTC account.  This allows ISTC to share information about your account with Safeguard, which allows Safeguard to provide support integrating your Safeguard created legal entity with the underlying ISTC 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.

IRA Services Trust Co. Contact Information

Phone: 800-248-8447

Monday – Friday, 8:00am – 5:00pm Pacific time

www.iraservices.com/contact-us

www.iraservices.com/forms

 

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