Yes. All IRA plans are required by law to have a custodian. This is a non-negotiable feature of the IRA structure under IRC Section 408. What matters is understanding what the custodian actually does, and what they do not do.
What the custodian handles
The custodian's role is administrative and regulatory. IRA Resources, our partner custodian, is responsible for:
- Holding the IRA on record and maintaining the account
- Processing contributions, distributions, rollovers, and transfers at the IRA layer
- Filing Form 5498 annually to report the IRA's fair market value to the IRS
- Tracking beneficiary designations and maintaining plan records
- Documenting the IRA's investment into the trust or LLC entity that provides you with checkbook control.
These are the functions the IRS requires a regulated institution to perform. IRA Resources holds a charter and certificate of authority regulated by the South Dakota Division of Banking, which qualifies them to serve in this role.
What the custodian does not handle
The custodian has no involvement in the investments made through your IRA LLC or IRA Trust. Once the IRA is invested into the plan entity, all investment decisions and transactions are executed directly by you as manager or trustee. The custodian does not review, approve, or process those transactions.
This is the defining feature of checkbook control: the custodian operates in the background handling compliance and reporting, while you operate at the investment level with direct signing authority.
Solo 401(k) plans are different
A Solo 401(k) is a qualified employer plan, not an IRA, and is not subject to the custodial requirement under IRC Section 408. You serve as both the plan sponsor and the trustee. There is no custodian involved, which eliminates custodial fees entirely and simplifies the administrative structure.
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Disclosure
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.
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