Frequently Asked Questions

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Who is Kingdom Trust?

Kingdom Trust is an independent qualified custodian, regulated by the South Dakota Division of Banking. We specialize in unique and innovative custody solutions for individual investors like you. Every Individual Retirement Account (IRA) holder, for example, must use a bank or trust company like Kingdom Trust to custody his or her account. Learn more about our company by visiting About Kingdom Trust now.

What is a custodian?

Unlike retirement administrators or facilitators, custodians like Kingdom Trust hold an actual bank or trust charter. Kingdom Trust maintains strict policies, procedures, controls and disclosures to meet the highest of custody standards for our clients.

What types of investments does Kingdom Trust allow inside a retirement account?

Unlike regional custodians or those limited to specific investment types, Kingdom Trust’s service area and investment options are nearly unlimited. The Internal Revenue Service only prohibits investments in life insurance, collectibles and S corporations. All other alternative investments are acceptable as long as they are structured properly and do not include a related party.

We service clients in all 50 states and in several foreign countries and custody over $12 billion in assets for over 100,000 clients. So whoever you are, wherever you are located and whatever you are interested in, we have the experience and knowledge to assist you. Schedule a call to speak to a member of our team today!

Why do IRA holders need a custodian and/or administrator?

Per Internal Revenue Code (IRC) Title 26 Sec. 408, every IRA holder must have a federally approved custodian or administrator like Kingdom Trust.

What is Kingdom Trust’s role as a custodian?

Kingdom Trust is chiefly responsible for the safekeeping and administration of your account assets and for the reporting of all activity within the account to you and to the IRS.

Why is Kingdom Trust not on the IRS list of approved custodians?

The list contains only non-bank trustees and custodians approved by the IRS to serve as IRA custodians. It does not include those entities that qualify as banks under the Internal Revenue Service guidelines, under which Kingdom Trust qualifies.

IRC Title 26 Sec. 408 states that an IRA must meet the following requirements:

(a) Individual retirement account

(2) The trustee is a bank (as defined in subsection (n)) or such other person who demonstrates to the satisfaction of the Secretary that the manner in which such other person will administer the trust will be consistent with the requirements of this section.

(n) Bank
For purposes of subsection (a)(2), the term “bank” means—
(1) any bank (as defined in section 581),
(2) an insured credit union (within the meaning of paragraph (6) or (7) of section 101 of the Federal Credit Union Act), and
(3) a corporation which, under the laws of the State of its incorporation, is subject to supervision and examination by the Commissioner of Banking or other officer of such State in charge of the administration of the banking laws of such State.

Section (n) references 26 USC 581 and its definition of “bank”:

26 U.S. Code § 581 – Definition of bank

For purposes of sections 582 and 584, the term “bank” means a bank or trust company incorporated and doing business under the laws of the United States (including laws related to the District of Columbia) or of any State, a substantial part of the business of which consists of receiving deposits and making loans and discounts, or of exercising fiduciary powers similar to those permitted to national banks under authority of the Comptroller of the Currency, and which is subject by law to supervision and examination by State, Territorial, or Federal authority having supervision of banking institutions. Such term also means a domestic building and loan association.

Can Kingdom Trust give me investment advice?

Absolutely not! We are prohibited by law from providing investment advice and from selling investments of any kind. Nor do we offer any type of tax or legal advice. We are a neutral third party to any type of investment decision or opportunity.

It is important to note that we strongly recommend you make any investment decisions with the help of a financial team that includes, but may not be limited to, an accountant, a lawyer, a financial planner and any other professional who specializes in the type of asset in which you are considering investing.

What is a Self-Directed Individual Retirement Account (IRA)?

A Self-Directed IRA is a retirement account in which you are not limited to stock market-based investment choices. With a truly Self-Directed IRA, the list of investment options is almost limitless. Once you find an investment to your liking, Kingdom Trust will help you take the steps necessary to acquire it with your Self-Directed IRA.

You may invest in alternative assets like real estate, private companies, promissory notes, precious metals, timber rights, green energy and much, much more. As a Self-Directed IRA investor, you have considerably more control over your retirement portfolio than those who deal only in exchange-traded investments.

Why have I not heard of this before?

The Self-Directed IRA has been around since the creation of the Individual Retirement Account (IRA) in 1974. They are essentially one and the same. When most people think of an IRA, however, they probably think of what banks, brokers and financial advisors typically have to offer. These vendors usually have a portfolio of stocks, bonds and mutual fund investments from which you may pick, and their salespeople are trained and incentivized to sell those specific investment products to you.

What if my financial advisor has never heard of a Self-Directed IRA?

This is, unfortunately, more common than you would think. Kingdom Trust works with advisors to help educate them on the benefits and the structure of a truly Self-Directed IRA.

Feel free to have your advisor contact Kingdom Trust so that we can educate him or her on the benefits of a Self-Directed IRA.

What types of Individual Retirement Accounts are there?

There are four basic types of Individual Retirement Accounts:

Kingdom Trust can hold each of these types of accounts, as well as Solo 401(k) plans. Please note that we do not administer Solo 401(k) plans. Unlike IRAs, which are opened via our Standard Account Kit, Solo 401(k) accounts must be established using our Custodial Account Kit.

How do I know which account is best for me?

You should discuss your particular situation with a tax or accounting professional prior to making a choice.

Do I qualify for a Self-Directed IRA?

You (or your spouse) must have earned, taxable income in the United States in order for you to contribute to an IRA. For Traditional, SEP or SIMPLE IRAs, you must also be under age 70 1/2 to contribute. Roth IRA contributions are limited by income levels.

If you have an old 401(k), a brokerage firm IRA or a defined benefit plan, then you can move those funds into a Self-Directed IRA with Kingdom Trust. If you do not currently have an IRA or another retirement plan, you can open an account with Kingdom Trust today to get started.

How do I fund my Self-Directed IRA?

You fund your Self-Directed IRA by contributing, transferring existing cash or assets from another IRA, or executing a rollover from a defined benefit plan.

What is a prohibited transaction in a self-directed account?

Along with the freedom and flexibility of a self-directed retirement account comes rules that you must be aware of. All retirement plans, whether self-directed or otherwise, must adhere to IRS rules on prohibited transactions. You and your team of professionals must understand IRC Sec. 4975 regarding prohibited transactions and disqualified parties to avoid tax penalties and a potential loss of the account’s tax-advantaged status.

Your retirement plan is not to benefit you (the account holder) or beneficiaries prior to retirement age. Some examples of prohibited transactions include the following:

selling, exchanging, or leasing personally-owned property to your account;
lending account funds or extending credit on your account to a disqualified person;
furnishing goods, services or facilities by the plan to a disqualified person;
transferring plan income or assets to a disqualified person;
a fiduciary dealing with income or assets of a plan in his or her best interest; and
a fiduciary receiving any consideration for his or her own personal account from any transaction involving the income or assets of the plan.

Notable disqualified persons include the account holder; his or her spouse; his or her descendants, ancestors and their spouses; entities in which the account holder is a 50% or greater owner; plan fiduciaries and anyone providing services to the plan.

Along with various blog posts on this site, you may also download additional materials on this topic on our eBooks page. You can also view the IRS web page that discusses prohibited transactions here. Also familiarize yourself with important documents such as IRS Publication 590-A and 590-B and 26 USC 4975.

What are some prohibited investments in a self-directed account?

According to the IRS, investments that cannot be held by any type of Individual Retirement Account include

Life insurance policies
Collectibles (including works of art, gems, rugs, antiques, stamps and alcoholic beverages)
Certain metals and coins (see 26 USC 408[m][3] for some exceptions)
Stock in an S corporation (as defined in 26 USC 1361)

What other rules and regulations do I need to know?

We strongly encourage you to consult tax, legal and accounting professionals when considering any kind of investment. Every investor should know as much as he or she can about disqualified persons and prohibited transactions, a potential tax ramifications such as UBIT and UDFI.

How do I know my personal information is safe with Kingdom Trust?

Our technology providers are vetted and audited using the highest of security standards including SSAE 16 certifications, PCI-DSS compliant servers, and other enhanced features for data center, website and network security. Kingdom Trust and its technology providers continue to evaluate new security products to ensure we are protecting your information now and in the future.

How do I get started?

You can start by scheduling a consultation with one of our Client Service Representatives today. Our qualified staff will answer any questions you may have and walk you through the account opening and transfer processes. Our team is second-to-none and can be reached via phone or email at [email protected]. If you prefer, you can fill out the online account opening form and one of our representatives will be in touch with you the next business day to assist you in completing your investment.

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COMMON ACCOUNT HOLDER QUESTIONS

How do I fund my Kingdom Trust IRA?

There are several options when funding an IRA at Kingdom Trust:

Annual contribution
Rollover from a qualified plan, such as a 401k, 403b, defined benefit plan or IRA
Direct IRA-to-IRA transfer

The Kingdom Trust staff can certainly assist you in answering any specific funding questions you may have.

Once I submit funds, is the cash in my account available immediately?

Funds received via a check are posted to the account within 1-2 business days. Wires are generally posted the same day unless they are received after 2 p.m. CST.

How do I title my investment?

Please title your investment in the following format: The Kingdom Trust Company, Custodian, FBO Client Name Account Number. It will look something like “The Kingdom Trust Company, Custodian, FBO Joe Smith Roth IRA 1234567.”

What are my fees?

That depends on what fee schedule you are on. For most Self-Directed IRA, Solo 401(k) and other custodial account holders, you are on the Standard Fee Schedule. Kingdom Trust also has fee schedules specific to particular assets or investing methods, such as our Precious Metals, Crowdfunding and Single-Member LLC Fee Schedules. Please see your fee schedule for a specific breakdown of fees.

What is the minimum cash balance I must maintain in my account?

That depends on what fee schedule you are on. However, for the majority of our individual account holders, the amount that must be maintained at all times in the account is $500.

When are fees due?

This also depends on your fee schedule. Generally, your account establishment (or account setup) fee is due at the time the account is established. The annual account fee is calculated and billed annually on the anniversary month of the account open date, but it is initially charged at the time the account is opened and funded. All other miscellaneous fees are generally due at the time of processing the specific request.

How do I add, update or change my payment information?

Easy! You can add, update or change payment information by completing our Information Update Request form and emailing or faxing it back to us. The form can be found in the Account Forms section of this website. Any questions about the form should be directed to Client Services at [email protected] or by scheduling a call.

How do I add, update or change my contact information?

Easy! You can add, update or change contact information by completing our Information Update Request form and emailing or faxing it back to us. The form can be found in the Account Forms section of this website. Any questions about the form should be directed to Client Services at [email protected] or by scheduling a call.

How do I transfer an asset out of my Kingdom Trust account?

Your new custodian will need to provide Kingdom Trust with their transfer documents, which can be emailed or faxed to our offices.

How do I take a distribution from my Kingdom Trust account?

We require a completed IRA Distribution Request form, which can be emailed or faxed to our offices. The form can be found in the Account Forms section of this website. Any questions about the form should be directed to Client Services at [email protected] or by scheduling a call.

How do I convert a Traditional IRA to a Roth IRA?

Simple! First, you have to open a Roth IRA account with Kingdom Trust. Then, you will need to complete a Conversion Instructions form and email or fax it back to us. The form can be found in the Account Forms section of this website. Any questions about the form should be directed to Client Services at [email protected] or by scheduling a call.

What is a Required Minimum Distribution (RMD), and when must I take it?

The IRS requires that you take a distribution from your Traditional IRA after the age of 70½. The RMD must be taken by December 31 of that particular tax year UNLESS you turn 70½ during that year—in which case you have until April 1 of the following year. Kingdom Trust recommends you speak with a tax advisor for questions that are more specific about distributions and RMD requirements.

How does Kingdom Trust calculate my RMD?

The RMD amount is calculated upon the December 31 value of the account for the respective tax year. Kingdom Trust uses the fair market value (FMV) formula provided by the IRS to make this calculation. Please note that RMD letters go out to applicable clients each January.

If I am 70½ or older and do not have enough cash in my Kingdom Trust account to take the RMD, what are my options?

You can liquidate assets in your account to create enough of a cash balance to take the RMD, or you can request a distribution of those assets “in-kind” up to the value required. You can also take a distribution of funds from another IRA until you meet the RMD amount.

When will I receive Form 1099 for tax purposes?

The IRS requires custodians to report all distributions made from IRAs for the prior year on Form 1099 each year. The form is sent to distribution recipients by January 31 and to the IRS by February 28 (or March 31 if filed electronically).

If you are expecting a Form 1099 and do not receive it by the end of February, please contact us and we will provide you with a copy. Please note that you will not receive a Form 1099 from our firm unless you received a distribution from a Kingdom Trust account.

When will I receive Form 5498 for tax purposes?

The IRS requires custodians report the fair market value (FMV) of IRAs and the contributions made to those accounts annually on Form 5498. The IRA type, contributions made during and for the tax year, and the FMV at the end of the tax year are all reported on Form 5498. A copy is sent to both the account holder and the IRS by May 31 since account holders have up to Tax Day to make a previous year contribution to Traditional and Roth IRAs.

If you need the information sooner, you may be able to use the information on the annual statement sent at the end of January, or we can provide you with an impromptu statement. If you are expecting a Form 5498 and do not receive the form by the end of June, please contact us and we will provide you with a copy. Please note that you generally will not receive a Form 5498 unless you made a contribution to your account for the tax year.

How do I add, update or change the ADR or interested party information on my Kingdom Trust account?

You can add, update or change Account Designated Representative (ADR) and/or interested party information by completing our Information Update Request form and emailing or faxing it back to us. The form can be found in the Account Forms section of this website. Any questions about the form should be directed to Client Services at [email protected] or by scheduling a call.

How do I add, update or change beneficiary information on my Kingdom Trust account?

You can add, update or change beneficiary information by completing our Beneficiary Designation and Change Request form and emailing or faxing it back to us. The form can be found in the Account Forms section of this website. Any questions about the form should be directed to Client Services at [email protected] or by scheduling a call.

How do I open an Inherited IRA with Kingdom Trust?

For the most part, this process is the same as any other new account opening. Simply complete the online application to get started. One difference for an Inherited IRA is that Kingdom Trust will need a copy of the deceased’s death certificate.

Does Kingdom Trust administer Solo 401(k) accounts?

While Kingdom Trust cannot administer a Solo 4o1(k), we can hold a Solo 401(k) on our platform as a custodial account.

I received my year-end valuation letter from Kingdom Trust. Can I email the completed valuation to you instead of mailing it in?

Yes, an email with the values will be acceptable. Email the valuation to [email protected].

Does an IRA LLC operating agreement have to be prepared by an attorney? Can a CPA prepare the operating agreement?

Because an operating agreement is a legal document, most jurisdictions consider the preparation of such a legal document by someone other than an attorney as the unauthorized practice of law. We highly recommend you have it prepared by an attorney.

Does Kingdom Trust require a special advisor clause in the operating agreement of an IRA LLC?

Kingdom Trust does not require one, but one should be added if it is necessary to the operation of the IRA LLC.

Can fair market value (FMV) be the value listed on my K-1? I do not have a fair market valuation/analysis performed annually, so the closest I can get is via the capital account information on the K-1.

The FMV is not the same as the value you see on your K-1. We do not require a full company appraisal or company evaluation to calculate your FMV. However, Kingdom Trust needs you to provide us with some fair market valuation to the best of your ability on an annual basis.

How can I receive a statement?

If you need a current statement, you may request an impromptu statement from Client Services. However, if you merely want to review your investment holdings, account balance and so on, you can log in to your online account to view detailed information about your account. If you need help navigating your online account, check out the Kingdom Trust Client Portal Demo video on our Webinars and Videos page.

How do I transfer an existing note?

The transfer of a note is like any other transfer of assets between custodians. It will consist of a transfer form and should include an assignment of the note from Custodian A, Custodian, FBO Client’s Name to The Kingdom Trust Company, Custodian, FBO Client’s Name.

What happens if I miss the deadline to turn in my account’s fair market valuation?

In the event that current values are not turned in to Kingdom Trust by the deadline, we will include the most recent values on the annual statement and any tax reports we send out at the end of January. We will update the values once they are received.

If you do have tax reportable events and can’t get the 12/31 value to us on time, this might affect the courtesy RMD calculation that we send out. Please refer to your tax advisor with questions about values if you had any tax reportable events from your account this year.

If you miss the deadline and want us to regenerate any forms once we’ve sent them out, you will incur a Late Asset Valuation Fee.

Can I open a Self-Directed IRA account, contribute for the current year, and also contribute for the previous year?

Yes. You have until April 15 of the current year to contribute on behalf of the previous year and it will not count against the current year’s contribution limits.

I own a private equity investment and the company has now gone public. How do I go about selling my shares?

This type of stock typically has certain restrictions placed upon it. Those should be outlined in the documentation provided to you when you purchased the private stock. The company where you purchased it will need to outline the sale process for you.

Is my uninvested cash FDIC-insured?

The cash held by Kingdom Trust, for the benefit of clients, is typically held in financial institutions covered by the FDIC. FDIC insurance covers up to $250,000 per account and applies to cash deposits only. There are some circumstance where by FDIC insurance may not be available for 100% of your un-invested cash. Please note that FDIC insurance does not insure a client’s investment(s) just cash.

Is Kingdom Trust regulated and by whom?

The South Dakota Division of Banking regulates Kingdom Trust. We operate as a trust company under authority granted by the state of South Dakota. We meet all capital requirements and comply with all state statutes and regulations.

Does Kingdom Trust have adequate insurance coverage?

Pursuant to South Dakota law, Kingdom Trust maintains a $1 million Errors and Omissions insurance policy and a $2 million fidelity bond. We also maintain general liability, property insurance and a Worker’s Compensation insurance policy for our employees.

How are assets protected in the event Kingdom Trust closes?

It is important to note that Kingdom Trust acts only as a custodian. Your investments are not the property of Kingdom Trust and are not physically held in a corporate facility. In the event that Kingdom Trust closes, your assets would be transferred to another federally approved custodian for the benefit of the account holder.

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INSTITUTIONAL CUSTODY SOLUTIONS

What institutional custody solutions are available to my firm?

In order to meet our clients’ needs, we developed two custody options: a full-service solution and a document-only solution.

The Custody Rule requires that assets held by an independent custodian be held in a separate account under the client/fund name. However, some custodians require that cash and securities be re-registered in their name. At Kingdom Trust, clients may elect to maintain the cash and securities in the client/fund name or re-register cash and securities in Kingdom Trust’s name for the benefit of the account holder.

Kingdom Trust will either act as sole custodian taking full custody of cash and securities or work in concert with an additional custodian if requested or required by the institution. This is an important distinction for many institutions.

Our firm provides custody for advisors, fund managers, family offices, financial institutions, marketplace lending and crowdfunding platforms, and individual investors. These solutions include escrow services, global custody, pooled investment vehicle (PIV) custody and custody of underlying individual accounts, including IRAs and other retirement accounts, separately managed accounts (SMAs) and taxable accounts.

Why use a qualified custodian?

As a part of the Dodd-Frank Act passed in the late 2000s, the SEC issued amendments to Rule 206(4)- 2, the Custody Rule, under the Investment Advisers Act of 1940. The purpose of the amended rule was to strengthen requirements for the safekeeping of client assets and to prevent the misappropriation or misuse of assets defined as securities or cash.

The Rule requires certain Registered Investment Advisors (RIAs), including those with AUM in excess of $100 million and private fund advisors with AUM in excess of $150 million, to hold client funds and securities with a qualified custodian. These RIAs are subject to annual surprise audits by PCAOB-registered auditors, and if using a related party as their custodian, they must obtain an internal control report from the custodian.

After a few years of moderate enforcement and minimal fines, the SEC now places a major emphasis on compliance with the Custody Rule, with high-profile enforcement actions and large penalties for relatively small violations seemingly the current operation model.

It is important for advisors to understand the Custody Rule. Kingdom Trust has issued a number of white papers on the topic outlining the Rule and illustrating how advisors can comply.

Since the SEC issued amendments to Rule 206(4)-2, many issuers of private funds have elected to use an independent, qualified custodian in order to meet the requirements of the Rule. Others who are exempt from the Rule often engage a qualified custodian to add a degree of separation and level of transparency for their clients.

By utilizing the service and experience of our firm, private funds and their investors benefit from

increased transparency and accountability,
an added degree of separation between an investment advisor and client assets
saved time and cost associated with the use of a PCAOB-registered firm and preparation of an internal control report, and
compliance with the Custody Rule and regulatory requirements.

How are documents housed at your firm?

All original documents evidencing ownership are housed in Kingdom Trust’s secure storage facility. It features a dual-controlled environment and keypad entry, and no one person has access to enter the room or safes.

Digital copies of each document are stored on our main server, while duplicate electronic copies are stored on a second server, off-site, for disaster recovery purposes.

Is uninvested cash FDIC-insured?

Is Kingdom Trust regulated and by whom?

Why a South Dakota trust charter?

South Dakota is the national leader in the formation and administration of trust charters. The lawmakers in South Dakota recognize the opportunities that exist in the trust world and have built an infrastructure that supports our industry. Their diligence and foresight have proven to us that the South Dakota Division of Banking understands the regulatory, compliance and operational requirements of a successful trust company.

Does Kingdom Trust have adequate insurance coverage?

How are assets protected in the event Kingdom Trust closes?

It is important to note that Kingdom Trust acts only as a custodian for the assets held inside a Kingdom Trust account. A client’s assets are not the property of Kingdom Trust and are not physically held in a corporate facility. In the event that Kingdom Trust closes, the assets would be transferred to another federally approved custodian for the benefit of the account holder.

How do I know clients’ personal information is safe with Kingdom Trust?

Does Kingdom Trust interface with any portfolio management systems?

We have invested in leading software systems to provide value-added technology for investment advisors and investment sponsors who are seeking an institutional custody solution. Our technology will allow you to transition client information seamlessly between our system and yours. A data feed built by ByAllAccounts allows information to be pulled from our systems and integrated into your portfolio management system. The ability to aggregate client information is a vital consideration when choosing a custodian to administer your held-away accounts.

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ALTERNATIVE INVESTMENTS

What is an alternative asset?

An alternative asset is any investment asset not publicly traded. The IRS Code governing what types of investments can be held within a non-taxable retirement account does not specify what can be held within the account but rather what cannot be held. This means that your investment options are nearly infinite.

Some of the more common investments held in self-directed accounts are

Real estate (commercial and residential property, tax liens, rental property, etc.)
Precious metals (such as gold and silver bullion, American Eagle coins and platinum bars)
Private companies (including LLCs, limited partnerships and C corporations)
Private lending (such as notes secured by deeds of trust, unsecured notes and mortgages)
Single-member LLCs
Bitcoin and other digital currency
Private REITS and funds
Crowdfunding and marketplace lending opportunities

Some less common investments held in a self-directed account include

Timber rights
Cattle
Equipment leases
Virtually anything else!

Are the investment possibilities truly endless?

The alternative assets we have mentioned here and elsewhere on our site are the most common but are by no means all of the investment possibilities available. If you have questions about a potential investment, simply schedule a call to discuss. While we are unable to give investment advice, we can let you know if a specific investment type is allowed to be held in a self-directed retirement plan. It is important to have a thorough understanding of the alternative investment in which you are considering investing.

How do I invest in an alternative asset?

The first step is to open a Kingdom Trust account and complete the funding of the account, via a contribution, a rollover or transfer of funds. From there, you complete an Investment Direction Kit (visit our Forms page) instructing Kingdom Trust of the investment you would like to make. Kingdom Trust will then complete an administrative assessment to ensure the investment can be held on our platform. You will be notified once the assessment is complete. Please note each investment’s procedures and forms vary slightly, so you should contact us for specific details.

Is there risk involved with alternative assets?

ALL investments, traditional or non-traditional, carry risks that can include loss of principal and/or return.

Can I still invest in traditional investments?

Certainly. That’s the beauty of using Kingdom Trust as your custodian! While we specialize in alternative investments, you can still invest in traditional investments such as stocks, bonds, mutual funds and certificates of deposit with Kingdom Trust.

Has the IRS ever publicly commented on digital currency?

The IRS treats digital currency (or virtual currency) as property for U.S. federal tax purposes, with a value determined in U.S. dollars. For more information on this, read Notice 2014-21 and speak with your tax advisor for guidance on investing in digital currency.

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PRECIOUS METALS

How do I find a precious metals dealer?

Kingdom Trust does not recommend or endorse any precious metals dealer, so you must perform the necessary due diligence. When searching for broker/dealers, you will want to review their payment terms, shipment and delivery costs, broker fees, return policies, industry association memberships and which mint the dealer uses.

How are precious metals valued?

Precious metals are traded on multiple world markets and have a continuously changing fair market value, which does not include dealer markups or commissions.

Kingdom Trust receives its price updates from BullionValues.org. The market values listed often vary from prices achieved in actual transactions, and their accuracy cannot be guaranteed. No dealer markup, markdown or commission is factored into these values, which means that your final market price may be different.

Please consult with your broker or dealer for more details or if you have further questions about valuations.

What precious metals depositories does Kingdom Trust currently work with?

We currently have relationships with Brinks Global Services, Delaware Depository, First State Depository, IDS Delaware and IDS Canada.

How do I know my precious metals are safely stored away?

Kingdom Trust uses well-established, nationally and internationally known storage facilities with excellent reputations in our industry. The storage facilities we use are regularly requested from our clients.

Can I add gold or silver coins I already own to my retirement account?

No, your IRA or another qualified plan cannot purchase precious metals you personally own. Keep in mind that you can make in-kind transfers of precious metals from one custodian to another.

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IRA-OWNED SINGLE-MEMBER LLCS

Does Kingdom Trust offer single-member LLCs?

Kingdom Trust offers a Self-Directed IRA through which our account holders can invest in a single-member LLC gaining “checkbook control.” The account holder is responsible for the creation of the single-member LLC and its supporting documentation and for finding a manager to manage the IRA LLC.

Has the IRS ever publicly commented on whether single-member LLCs are acceptable?

The IRS has not stated that IRA-owned single-member LLCs are acceptable or not acceptable. They have made it clear to their examiners that those structures are ripe for abuse and do keep a close watch over them.

Structured correctly, though, the single-member LLC can be a viable investment vehicle for a Self-Directed IRA.

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CROWDFUNDING & MARKETPLACE LENDING

What is crowdfunding?

Crowdfunding is the use of small amounts of capital from a large group of individuals to finance a new business venture, oftentimes online via websites called crowdfunding portals or platforms. The intent is to increase the potential pool of investors beyond the traditional circle of venture capitalists, business owners and their relatives.

What is marketplace lending?

Marketplace lending (also called peer-to-peer lending, social lending or crowd lending) is the common term for debt-based crowdfunding, which is an investment into an individual, business or project where the offering is a set return on investment over a predetermined timeframe. These lending opportunities are found on online marketplace lending portals pairing investors (lenders) with borrowers according to agreed-upon loan parameters.

What is equity crowdfunding?

Equity crowdfunding is an investment into a business where the offering is an ownership stake in the business in exchange for the investment capital.

What is a crowdfunding or marketplace lending portal?

A crowdfunding portal, or crowdfunding platform, is a website where prospective issuers or borrowers go to match up with interested investors and, likewise, where those investors go to see details of investment opportunities.

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INVESTMENT SPONSOR QUESTIONS

Why choose Kingdom Trust?

Our firm specializes in unique and innovative custody solutions for individual investors, investment sponsors, family offices, advisory firms, broker-dealers and various other investment platforms.

We keep the entire process simple and direct, both financially and operationally. We have dedicated our business model to serve the institutional investor marketplace and are primed to meet the needs of your office. To learn more about our company, visit the About Kingdom Trust page.

What types of investments does Kingdom Trust allow inside a Self-Directed IRA?

We service account holders in all 50 states and in several foreign countries and custody over $12 billion in assets for over 100,000 clients. Therefore, wherever your office is located, we have the capabilities, the technology and the knowledge to assist you.

What type of funds does Kingdom Trust work with?

We work with a variety of funds, including private equity funds, funds of funds, hedge funds and venture capital funds.

Does Kingdom Trust provide investment advice or endorsement?

No, as we do not provide investment advice or endorsement or sell investments of any kind. Nor do we offer any type of tax or legal advice. We are a neutral third party to any type of investment decision or opportunity.

Is Kingdom Trust regulated and by whom?

Why a South Dakota trust charter?

Does Kingdom Trust have adequate insurance coverage?

How are client assets protected in the event Kingdom Trust closes?

How do I know clients’ personal information is safe with Kingdom Trust?

What benefits will investment sponsors receive by working with Kingdom Trust?

By using an independent qualified custodian like Kingdom Trust, sponsors receive the following benefits:

Custody Rule compliance
Avoid the expense of a PCAOB annual audit
Transparency to investors throughout the investment process

What protections does the Custody Rule offer my investors?

The Custody Rule offers the following protections:

A requirement that the investment advisor must maintain funds and securities with a qualified custodian
A requirement that clients are notified promptly in writing by the investment advisor of the qualified custodian’s name, address, the manner in which the funds or securities are maintained at the opening of the account by an investment advisor on a client’s behalf, and any changes to this information thereafter
A requirement that the investment advisor obtains a reasonable belief that the qualified custodian sends an account statement, quarterly or more frequently, to each client for which it maintains funds or securities, identifying both the number of funds of each security in the account at the end of the period and all transactions in the account during the period
A requirement for an independent verification (surprise audit) on an annual basis

What does the term “custody” include?

The term “custody” includes

Possession of client funds/securities documents or evidence thereof
Any arrangement in which you are authorized or permitted to withdraw client funds or securities maintained with a custodian upon your instruction to the custodian
Any capacity that gives you or your supervised person legal ownership of or access to client funds or securities

Why would a private fund be looking for the services of a trust company?

In addition to being a trust company, Kingdom Trust is also a qualified custodian under the Investment Advisers Act of 1940. As a result, any fund that might be required to use a qualified custodian under the Rule would be looking to us for those services. It is common knowledge these days that retirement accounts are a viable source of capital for hedge funds, private equity funds and the like. Kingdom Trust specializes in holding non-traditional assets like fund investments and private equity, precious metals, real estate, etc.

From a fund custody perspective, what should a new fund manager know?

The most important thing that a fund manager can do for him or herself is to know the rules. Understand the Custody Rule because it is something at which the regulators are taking a real hard look at during exams. Know the rules and seek knowledgeable, legal advice because mistakes can be costly.

What should a fund manager know when it comes to working with the individual investor or a Self-Directed IRA?

You must understand IRC Sec. 4975 regarding prohibited transactions and disqualified parties. “You” refers to both the manager and fund itself. Know and understand the Plan Asset Rules. If you are going to accept retirement funds as investments, and if more than 25% of the fund is retirement money, you will need to understand your responsibilities.

What is the most common prohibited transaction seen from funds?

The most common one, especially for startups, is that the initial investors are typically the manager and his or her family and friends. They want to put in money from their own pockets and from their own retirement accounts. If done right, which will take sound advice from competent counsel, such combinations may be possible under the rules. If done incorrectly, there can be some ugly consequences to the fund, the retirement account and the account holder.

Such consequences include anywhere from 15%-100% penalties, disqualification of the account, immediate distribution of all of its assets as ordinary income and possible early withdrawal penalties to account holders who conduct prohibited transactions in their IRAs. It is imperative that investors know the rules and receive good advice.

Visit our eBooks page for additional education materials on prohibited transactions. You can also view the IRS web page that discusses prohibited transactions here.

Why should fund managers use Kingdom Trust?

Kingdom Trust offers flexibility. We can hold a fund’s assets, and we can hold a fund’s investor accounts. While we specialize in holding non-traditional assets, we will also hold most traditional assets as well. That gives the fund manager, an advisor or the investor the ability to have all of the investments under one roof. Not all custodians will do that, as some will custody the fund but not the investor accounts. Some will hold the traditional assets but not the alternatives, either at the fund level or the individual level. Kingdom Trust can accommodate both.

Does Kingdom Trust interface with any portfolio management systems?