1031 intermediary safeguards

[Martin Z.]

Hi everyone, I'm new to 1031 exchanges, what safeguards are there so an intermediary doesn't steal your funds on a delayed exchange? Are the funds somehow insured?

Thank you in advance.

[Dave Foster]

@Martin Z. in addition to the usual E&O and bonding your best protection is to only use an intermediary that offers you segregated dual signatory qualified escrow accounts in an FDIC insured institution.

1. Segregated - Your funds are not mingled with any other exchange that may be susceptible to an adverse event like a divorce, partner squabble etc.

2. Dual Signatory - Two signatures, the intermediary and you, are required for the movement of any money.  If you don't sign the money doesn't move.

3. FDIC - know who didn't lose money in the last crash no matter how many banks went under? - banks and depositers!