How to title real estate your IRA buys

Titling is clerical work that carries disproportionate consequence. Get it wrong and the paperwork says something about your account that is not true, and unwinding that later is expensive.

The format

Every custodian has its own exact wording. It generally looks like one of these:

• ABC Trust Company, Custodian, FBO Jane Smith IRA
• ABC Trust Company, Custodian FBO Jane Smith IRA #12345
• ABC Trust Company FBO Jane Smith IRA

FBO means for benefit of. The custodian is the legal owner of record. Your IRA is the beneficial owner. You are named only to identify which account.

What never appears: your name by itself, your name and the custodian's as co-owners, or your personal LLC.

Get the exact string from your custodian in writing and forward it to the title company yourself. Do not let anyone paraphrase it. Missing account numbers and creative abbreviations produce recording problems and, worse, ambiguity about who owns the asset.

Everything has to match

Not just the deed. The same entity name goes on:

• The purchase agreement, signed by the custodian on the account's direction, not by you personally
• The earnest money, wired from the account
• The title commitment and the title policy
• The closing statement, with the account as buyer
• Property insurance, with the custodian as named insured and the account as the interest insured
• The property tax record
• The lease, with the account as landlord
• Any loan documents, non-recourse and in the account's name
• The property manager's agreement, with the account as the owner and principal

One document in your personal name creates a real question about what happened, and questions like that surface during audits, lawsuits, divorces, and sales, which is to say at the worst times.

Your signature

You do not sign as the owner. You sign a direction to the custodian instructing it to sign. The custodian executes.

Some custodians allow a limited power of attorney letting you sign certain documents on the account's behalf, which speeds things up considerably. If yours offers it, set it up before you are under contract, not during.

What to tell the closing team early

Call the title company and the closing attorney at the start, not the week of closing. Tell them:

1. The buyer is a retirement account with an institutional custodian.
2. Here is the exact titling string.
3. The custodian signs, not the buyer, and signature turnaround is measured in business days.
4. Funds come by wire from the custodian on a processing schedule.
5. Send every document requiring signature earlier than you normally would.

Title companies that have never closed one of these are the main source of delay. Ask directly whether they have. If not, budget extra time and be more involved than you would otherwise be.

Insurance, which gets missed

The policy has to cover the account's interest, with the custodian as named insured in the custodian's format. A policy in your personal name covering a property your IRA owns is both a coverage gap and a paperwork inconsistency.

Tell the insurance agent the situation plainly. Most carriers handle it routinely once they understand it, but the application usually needs a human conversation rather than a web form.

When there are two owners

An IRA can co-own with an unrelated party as tenants in common. The deed states each owner's percentage, and from that day forward every expense and every dollar of income splits in exactly that proportion. Every time. A single unequal contribution corrupts the percentages and creates an argument about whether one party got a benefit from the other.

If the co-owner is you personally, or any disqualified person, do not proceed without an attorney who does this specific work. The IRS has treated joint purchases between an IRA and its owner as prohibited in multiple rulings, and this is not an area for improvisation.