All plans require 3rd party administration to protect retirement plan integrity. But it’s particularly important for Private Retirement Trusts. Why?
1 – because you are allowed to fund your private assets into your own PRT plan and direct them when and how you want, there needs to be an arm’s length layer of protection to help honor the asset protection benefits that you receive as the plan beneficiary. Its common sense – you can’t administrate your own assets and expect to receive the layer of creditor defense awarded to a legitimate plan.
2 – because California state law says you have to!
A Major Lack of Expertise
Unfortunately, there are not many administrators that understand how to admin private assets. Qualified plan TPAs are geared toward investment management platforms with financial companies like John Hancock, Transamerica, Mass Mutual, etc.
A true PRT Administrator is geared toward business and seeks to help maximize the protection of “active” and “complex” private assets like private business stock or member interest, that are allowed in a PRT, as well as to help maintain cash flows to a successful business or private investment portfolio, to optimize ROI (return on investment), which includes minimizing costs.
Don’t become “BAD” Case Law
There is nearly 200 legal case examples of successes and failures and the difference is black and white – a successful Private Retirement plan is one where there was proper and adequate administration that made the plan “legitimate”. Failed cases all had no or poor administration, the defense was lost and assets were forfeited to creditors and irretrievable.
Conclusion: if anyone recommends or sets up a private retirement plan for you and does not provide or advocate critical administration support services, RUN AWAY, OR YOU COULD BECOME BAD CASE LAW!
We believe that ever person should have a custom designed Private Retirement Plan and we wrote about here. If you want to find out exactly what requirements are needed to maintain proper administration, click here to find out more…