For those looking to direct rollover or transfer their IRA,
whether Traditional, SEP or SIMPLE IRA to a Self-Directed Solo 401k, a type of solo 401k for self employed business owners
that comes with checkbook control component (a/k/a Solo 401k checkbook control),
in addition to submitting IRA direct
rollover forms, which will be prepared by your Solo 401k provider, you may
need to also provide Vanguard a Self-Directed Solo 401k cover letter explaining
the Vanguard IRA rollover to Solo 401k process.
Therefore, consider including the following language in your
cover letter to Vanguard to timely process direct rollover or transfer of your IRA to a Solo 401k checkbook control:
To: Vanguard
From: John Doe
Re: Direct Rollover of IRA to Solo 401k
To Whom It May Concern:
Please find enclosed executed IRA direct rollover for
transferring my Vanguard IRA to my new Solo 401k.
By way of background, pursuant to 401k regulations, self
employed business owners may serve as trustees of their 401k. Accordingly, my spouse and I are both self-employed, have established a Solo 401k and are both listed as trustees of the plan.
In case you are not familiar with regulations surrounding business owners serving as trustees of their Solo 401k, please visit following IRS link containing specific language that references who may act as trustee of a 401k.
“Trusts and trustees. 401(k) plans are funded through a trust established to hold and invest the plan’s assets. At least one trustee is appointed to have responsibility for the activities of the trust and its assets. This is a serious responsibility with considerable potential for liability. Trustees might include the business owner, an employee, or a financial or trust institution.”
Please contact me or my Solo 401k provider if you require further clarification.
In case you are not familiar with regulations surrounding business owners serving as trustees of their Solo 401k, please visit following IRS link containing specific language that references who may act as trustee of a 401k.
“Trusts and trustees. 401(k) plans are funded through a trust established to hold and invest the plan’s assets. At least one trustee is appointed to have responsibility for the activities of the trust and its assets. This is a serious responsibility with considerable potential for liability. Trustees might include the business owner, an employee, or a financial or trust institution.”
Please contact me or my Solo 401k provider if you require further clarification.
Sincerely,
John Doe, Trustee of the XYZ SOLO 401K
No comments:
Post a Comment