Do You Need to Set Up an LLC to Open a Self Directed IRA?

Estimated reading time: 2 minutes(Last Updated On: November 30, 2018)

If you’re like many then you’re probably getting tired of losing money with your IRA. A Self Directed IRA can give you the retirement investment savings you desire. It provides you with more control over your retirement investments and more investment options. Recently, many investors have heard of setting up an LLC as yourself directed IRA, but at Quest Trust Company we feel these are types of accounts are illegal and likely to be regarded as prohibited transactions. Instead, have yourself directed IRA managed by a custodian with the experience and knowledge to steer you clear of these illegal account setups.

A Custodian Account is an account that is offered by most financial institutions. If they offer IRA accounts they usually offer Self Directed IRA accounts. However, most custodial accounts offered with these financial institutions have limitations on the type of investments you can make. Most financial institutions deal with stocks, bonds, and mutual funds and don’t allow you to buy any other investment types although it is allowed by the IRS. If you open a self directed IRA you don’t get the investment advice and mix of publically traded assets, but what you do get is to increase your investment options, you are able to take control of your retirement and invest in what you know best. Investing in assets like real estate, precious metals, loans or notes, private placements, oil & gas, and much, much more that may provide greater safety, security and profitability. The only difference is that you now choose what you invest in rather than your broker or financial advisor. The custodian manages the paperwork and transactions for you.

You can find custodians that are knowledgeable and experienced in other investment areas like real estate, mortgages, and private companies. Unfortunately, many self directed custodians don’t deal with investments like stocks, bonds, and mutual funds. If you want to invest in both traditional and non-traditional opportunities you may find it challenging to find a custodian that offers everything you need but because of the ability to move money and have numerous IRAs you may find it easy to invest in both traditional and alternative assets..


Do you need to set up an LLC to open a Self Directed IRA? Not only is the answer no, but doing so may cause you severe penalties and disqualifying your IRA transactions. Call Quest Trust Company to set up a custodian account today.