SDIRA Investment in Wrong Name

9 Replies

I just realized that one of my investments in my SDIRA was inadvertently executed in my name and not the name of my custodian FBO my IRA. Does anyone know how to change the Deed of Trust and Promissory note to my custodian's name FBO my IRA? The Deed of Trust was recorded a few months ago. I don't even know what vehicle would be used to make the change and who can do it, an Escrow company? Attorney? Any help is much appreciated.

@Julian Buick

This seems like a huge oversight by your IRA custodian. You will want to work with them to have this corrected. You will need a new deed of trust with the custodian FBO your IRA as the lender. You will likely want to work with the title company to prepare the documents, but the custodian will need to sign them, as well as create a corrective paper trail.

@Brian Eastman this was not an oversight by the custodian. I should take responsibility, I should have verified what had happened. The promissory note and deed of trust were written up and given to me to review. I realized they were in my name and modified them and sent them back to the borrower with the reason for modifying them. I sent the modified documents to my custodian and told them that is what will be signed. The custodian only requires proposed documents and not signed documents. There was no requirement for me to sign the note or trust deed so I was not at closing to see what actually got signed. When I got the signed documents from the title company they were the old ones, not the modified ones. At that point they were already recorded. There is usually no requirement for my custodian to sign anything so why or what would they need to sign now? It's only the borrower that signs the trust deed and promissory note. The person I talked to at the custodian was pretty clueless and didn't understand what I was talking about. The title company said they have never had to change the name on a promissory note and trust deed before and don't think they are allowed to do it. They suggested I Talk to my attorney. Sounds expensive

@Charlie Fitzgerald custodians do not create or modify promissory notes or deeds of trust. What @Brian Eastman said was to work with the title company to prepare the documents. I'm trying to find out what documents need to be prepared in order to change the name on the promissory note and deed of trust. Can there be an amendment? addendum? Revision? 

For anyone that's interested, this is what I did:

I had the borrower sign a new promissory note with my custodian name FBO my IRA account and destroyed the original.

I had the title company create an assignment of the deed of trust to go from my name to my custodian name FBO my IRA account. I will have to sign this personally. I spoke to my custodian about this and they said it would be fine. After it has been recorded it should go to them and they can stamp their approval on it.

Seems pretty straight forward. Anyone see any potential issues with this?

@Brian Eastman @Dmitriy Fomichenko @Charlie Fitzgerald