Do Trustees have to be Accredited?

[Bryan O.]

I have a solo-401k that I would like to invest. I have little desire for the 401k to own property, but I do want to invest it in RE or small businesses (equity or as straight lending). I have been looking at various note groups, HML groups, and angel investing and they all say you must be accredited. As I am not yet accredited, that rules out using my own funds to invest. Since I am the trustee of a 401k wouldn't I be eligible to use the 401k funds on these types of opportunities? I would think that accreditation should be irrelevant to the trustee of the fund. Is there a particular requirement that relates to this?

[Rajeev Kotyan]

@Bryan O.: With a Solo(k) there are either one of two requirements to completed to satisfy the accredited investor

(1) The plan participant (i.e. you) are accredited; or

(2) The plan itself is accredited --- this means that the plan has assets in excess of $5,000,000 and the trustee is a sophisticated person

The definitions can found on Code of Federal Regulations Title 17 Section 230.501 and Section 230.506(b)(2)(ii).

Also the firms that you are interested in investing with should be able to provide the clarity that you are asking for as they are the ones who have to document all of this...