What services does AET provide as an SDIRA Custodian? – IRA Central

American Estate & Trust (AET) is a Nevada-licensed, bonded, and regulated trust company specializing in custodial services for self-directed individual retirement accounts (SDIRAs).

Established in 2007, AET focuses on providing custody for the self-directed IRA and 401(k) market, aiming to reduce operating costs and deliver efficient processing times.

Services Provided by AET as an SDIRA Custodian

As a passive, non-discretionary custodian, AET offers a range of services to facilitate the administration and compliance of self-directed IRAs:

1. Compliance and Administration

Account Establishment: AET processes applications to establish IRAs, ensuring all necessary agreements and forms comply with IRS and U.S. Department of Labor regulations.
Regulatory Compliance: The company implements and adheres to Anti-Money Laundering (AML) programs and policies in line with the Bank Secrecy Act (BSA), the USA PATRIOT Act, Financial Crimes Enforcement Network (FinCEN) guidelines, Office of Foreign Assets Control (OFAC) regulations, and Anti-Terrorist Financing laws.

2. Transaction Processing

Fund Management: AET accepts, documents, and records contributions, transfers, and rollovers from other IRAs or retirement plans.
Investment Execution: Upon direction from the account owner, AET executes investment instructions, transferring funds to client-selected investments.
Document Custody: The company gathers and holds essential documents such as subscription agreements, operating agreements, offering memoranda, promissory notes, and certificates of investment ownership.
Income Recording: AET records income generated from assets held within the IRA.
Asset Liquidation: It facilitates the sale, withdrawal, or liquidation of investments as directed by the account owner and coordinates with investment sponsors during these processes.
Distributions and Transfers: AET facilitates distributions to the account owner or transfers to other IRAs or retirement plans as instructed.

3. Reporting and Communication

Tax Reporting: AET performs necessary tax reporting by filing IRS Forms 1099-R and 5498 as required.
Account Statements: The company provides account statements to account owners, detailing transactions and assets held within the IRA.
Regulatory Compliance: AET complies with applicable state and federal regulations governing IRA custodians.

Limitations of AET as an SDIRA Custodian

It's important to note that AET operates strictly as a custodian and does not:

Act as an investment, tax, or legal advisor.
Provide investment, tax, or legal advice.
Recommend or endorse specific investments or investment advisors.
Determine the fair market value of account investments.
Conduct due diligence on investments or investment sponsors.
Assess the suitability of investments for the IRA or account owner.
Determine whether a transaction qualifies as a prohibited transaction under IRC section 4975.

Responsibilities of the Account Owner

Given the custodian's passive role, the account owner bears significant responsibilities, including:

Custodian Selection: Choosing a qualified custodian for their IRA or retirement plan.
Investment Decisions: Selecting, managing, and disposing of investments held in the account.
Professional Consultation: Seeking appropriate tax or legal counsel to determine whether a proposed transaction is a prohibited transaction under IRC section 4975.
Due Diligence: Conducting thorough due diligence on investments and the principals involved.
Account Monitoring: Regularly monitoring account and investment performance.
Reporting Issues: Notifying the custodian of any unusual or unexplained investment activity or delays in receiving payments or information.
Tax Awareness: Understanding potential tax implications of certain investments and consulting with tax professionals to prepare and pay any due taxes.

In summary, AET serves as a regulated custodian, ensuring the administrative and compliance aspects of self-directed IRAs are managed effectively. However, the responsibility for making informed investment decisions and managing the account lies with the account owner.