SDIRA rental liability protection

[Don K.]

[b]Hi, I'm new to the website and have read a number of posts and am in the process of learning about SDIRA's. I'm planning to invest in rental properties through my SDIRA and am curious about liability protection for my IRA. I'd like to avoid the issues associated with a checkbook LLC. If someone is injured on a property owned by my SDIRA and they file a lawsuit, what liability is there for the IRA and or me personally? I plan to use liability insurance through the homeowner's policy, but don't want to rely only on that.

Thanks!

Don

[Chris Martin]

I ran into the same question about 6 months ago when I bought my first SDIRA property. I concluded that having a "standard" rental policy with a big name insurer was necessary and sufficient. I directed my SDIRA to employ a property management company to handle the rentals aspects. The IRA custodian "owns" the property, so in my case if someone were to sue they would sue Equity Trust Company. I am not sure what ETC would do... they would probably call me. My name is no where in public records, on any closing or lease documents. A lawyer can't sue me without the custodian providing confidential information. My understanding that exposure is limited to the IRA. In this context, I am comfortable that a plaintif in suit would have a hard time showing and proving personal neglegence on my part. I don't worry about my investment from a personal liability standpoint.