Question: My question didn’t get to you timely at RICH on Saturday. Here it is:
We lost our manager who was collecting rents and note payments for each of our ROTH IRAs (husband and I). I it okay to pay a friend to do this for me? If so, is there a special kind of a bank account we should utilize, similar to the kind that attorneys use to hold other people’s money? Our concern is that should something happen to our friend, what will happen to our funds, etc.? We want to foresee any unfortunate circumstances. Thank you for making yourself available for our questions
Answer: Thank you for your question. It is permissible for you to have the payments sent directly to your account here at Quest IRA if you like. We process many incoming payments each day, and the online system is updated nightly so that you can verify what has been deposited, as well there is an email notification that will be sent to the email associated with your account as Quest IRA for every transaction. You are right to be concerned about who handles your precious IRA monies. If you choose to have a non-disqualified party collect the funds, pay any bills for your real estate, etc., that is fine from an IRA standpoint. The manager can then simply remit the net proceeds to Quest IRA for deposit into your IRAs. To manage real estate, the person may need to be licensed by the Texas Real Estate Commission, assuming your rental real estate is in Texas. These professionals typically have a trust account into which they place the rental payments. There are also companies which service notes. In either of these cases, you will want to inquire whether they have errors and omissions and fidelity bond coverage, like we do. Since I am not in the business of managing real estate and/or servicing notes, I do not know how common that type of insurance coverage is for the people and companies who perform these services. I hope that helps. Have a wonderful day!