How to sue a self-directed IRA?

[Thomas Richter]

Hi all,

wondering if anyone can shed light on how to sue a self-directed IRA properly? We were in a purchase contract for a property titled in a self-directed IRA.

We canceled but the "owner" (beneficiary of the IRA) refused to release the deposit.

The beneficiary signed the agreement, but later on signed in the name of the custodian (which he was not authorized to do). 

Do we sue the beneficiary? The IRA? The custodian?

Anyone?

Thanks

Thomas

[Thomas Richter]

This was a while ago, but here is the outcome: 

I named the IRA, the beneficiary, and the custodian as defendant parties. The custodian prepared a declaration which stated that they are not liable. The beneficiary showed up to the trial.

The judge thought that she would probably agree with the custodian's declaration. I agreed with her and explained why there were three defendants. 

The judge then declared that she had to take the "standing" issue under consideration; in other words, she didn't know either whether it should be the IRA or the beneficiary (who is the self-director, but doesn't hold signature power) should be the correct defendant, or whether the IRA could even be sued at all (even though the IRA can hold title).

We argued the merits of the case which was pretty clear-cut in my favor.

After about two month we received the judge's written verdict which stated that the beneficiary had accepted responsibility by 

a) signing the contract (which he shouldn't have since he didn't have signing power - that should have been the custodian)

b) showing up to trial and arguing his case

c) counter-suing me for damages

The judge showed that there was no question as to who was entitled to the deposit; we had not removed any contingencies and the escrow company was court-ordered to release the deposit to me. The judge also awarded me $1,000 civil fine as per the purchase agreement (withholding of deposit without reasonable good-faith cause). 

The defendant promptly paid.

Needless to say this leaves the question about IRA property-ownership and whom to sue open.