Checkbook SDIRA - Trust vs LLC

[Paul Hom]

Sorry if this has been answered elsewhere - I have a generic SDIRA through New Directions and am looking to switch to a Checkbook Control SDIRA because of fees and some investments I'm interested in exploring.

I have a family trust and have had LLC's in the past. The LLC had some extra work involved vs my simple trust.

My question: for a checkbook control SDIRA what is the reason for using an LLC vs trust? (beyond liability). A trust would be less expensive to set up and maintain and simpler. I see though that most people are using LLC.

[Carl Fischer]

@Paul Hom

Good question-Using a trust instead of an LLC is fine. Most people don't understand trusts. The case that allowed checkbook controlled IRAs, Swanson vs IRS, used an LLC. You must include the salient points of the Swanson case and the operating document in your operation of the trust. Prohibited transactions can still occur including involving disqualified persons, signing personally for loans, mixing Ira and personal money, etc so be very careful and understand the subtleties involved. Check all the fees involved and make sure it is a savings. Using The trust is generally less expensive than an LLC for checkbook control.