Self-Directed Solo 401k needs LLC?

[Jared W Smith]

Hello all, 

As the title implies, I have set up my self-directed solo QRP 401k with checkbook control and trying to set up a business account. I know there are three known banks that deal with self-directed accounts but wanted to see if I could establish an account at my local bank. They just need the Articles of Organization to match the 401k, essentially saying there must be an LLC, to open the bank account. Have others gone this route? Experiences?

thanks
Jared 

[Mike S.]

You will have to shop with many banks to find one willing to open an account.

The first hurdle is to find bank willing to open account for trusts. Most will do revocable grantor trust (like a living trust) but won't touch any irrevocable trust. The 401k trust is neither revocable nor irrevocable, nor it is a grantor trust... So you may scare a lot of banks.

The second hurdle is that many local banks don't want to touch retirement plans as they are worried they may become liable to compliance issue with ERISA plans. I even had problem opening account for checkbook IRA LLC as there was the mention of IRA as the member...

Major banks should be more open to those, but you will need to find a business banker who is knowledgeable on trust accounts.

Again, shop around, a lot of banks will do it, even if your local banker doesn't know about it.

Solera and Titan Bank are two banks very well versed in solo 401k plans.