Our recommendation is no, and Self-Directed Plans does not offer this structure. Two separate plans, one for each account holder, is the right approach in virtually every case. Here's why.
A multi-member IRA LLC where two IRAs held by different individuals each own a membership interest is a structure some providers offer. This becomes problematic as spouses are disqualified persons to each other under IRC Section 4975(e)(2), which means any transaction between the two IRA owners within the shared entity must be handled with extreme care to avoid a prohibited transaction. The structure can be set up legally, but it requires precise execution and ongoing attention to remain compliant.
The administrative burden alone is significant. A multi-member LLC is classified as a partnership for tax purposes, which means the entity must file a Form 1065 partnership tax return each year. This is an added cost and complexity that two single-member LLCs do not carry.
The deeper problem is rigidity. Life events that are entirely normal create structural crises in a shared IRA LLC.
Divorce requires unwinding a jointly held investment entity at what is already a complicated time. Death triggers questions about the surviving spouse's membership interest and its interaction with beneficiary and inherited IRA rules. Reaching Required Minimum Distribution age at different times, which is commonly the case between spouses, forces distributions from a shared entity on a timeline that may not align with the investment.
Any of these events can require dissolving the partnership, which may mean liquidating investments on an unfavorable schedule.
If, after understanding these risks, you wish to proceed with a multi-member IRA LLC, do so only with direct involvement of a qualified tax attorney for initial setup, annual administration, and consultation before making any significant changes to the plan or its investments. This is not a structure to manage without specialized professional guidance.
Two separate self-directed plans accomplish everything a shared LLC is intended to do, without the partnership tax filing, complexity, and structural fragility. Both plans can invest in the same assets side by side. Each plan remains independently managed, independently distributed, and independently transferable.
That is the structure Self-Directed Plans recommends and supports.
This information is provided for educational purposes only and should not be interpreted as tax, legal, or investment advice. Readers are encouraged to consult a qualified professional who can offer guidance based on their personal situation.