It is well known that there is an enormous amount of money inside corporate retirement plans, namely 401k plans. The problem is that these plans only permit you to invest in what is offered by the plan. This becomes problematic if a large chunk of your net worth is exposed to a market collapse.
Can you buy raw land, rental property, cows or gold in your employer sponsored plan? Probably not. Legally you can but no employer is going to permit it. The solution is to move the money into a self-directed IRA account.
Very few plans permit what is known as an "in-service" distribution. This means you can not access the money until you quit, retire, or reach room temperature. What if there was a way to get at 1/2 or more of your 401k balance right now and invest it anywhere you want? Well, you can - if you are married. The concept is similar to what happens during a divorce. Assuming your 401k balance is community property, which it would be in Texas if any contributions were made while married. In a divorce a judge orders that the employer distribute some portion out to the other spouse.
In a similar way your spouse can request those funds while you are married. You do not have to get a divorce or even have an argument. Thanks to Austin attorney Henry Novak. Mr. Novak's concept is not mysterious. In fact it is simple.
A few disclaimers: Anyone who takes money out of a qualified plan is subject to income tax and perhaps a 10% penalty if they are under 59 1/2. Of course, the money can be rolled into an IRA and there are a few exceptions to the 59 1/2 rule. These rules are highly complex and require competent tax advice. An IRA rollover is not complex, neither is a self directed IRA using a trust company as a custodian. A broker will not allow you to hold a farm in your brokerage account. Other custodians will. In fact, an IRA can form an LLC to buy almost anything with a check, wire, or debit card. There are rules to follow but many have gone before you. For example if you buy a beach house with IRA money you cannot vacation there. You can deduct your expenses to go check or work on it. Just walk into Home Depot or Lowes and use your IRA LLC debit card. No need to involve the custodian.
Call or email David Disraeli for more details at 512-464-1110. david@pcfo.net