The Exeter Group of Companies offers and administers the following self-directed (client-directed) 1031 exchange, trust, agency and custody accounts and services for individual, corporate and institutional clients.
1031 Tax Deferred Exchanges
1031 exchange transactions allow real estate investors to sell one or more properties (“relinquished properties”) that have been held for rental, investment or business use and defer the payment of their federal and in most cases state capital gain and depreciation recapture taxes by reinvesting the in one or more properties (“replacement properties”) that will also be held for rental, investment or business use. 1031 exchanges are sometimes referred to as tax deferred exchanges, like kind exchanges or even starker exchanges. This tax deferral strategy allows investors to build wealth significantly faster than if they paid taxes along the way.
Investors must use a qualified intermediary, sometimes referred to as an accommodator or facilitator, to administer their 1031 exchange transaction, which must be set-up and in place before any of the relinquished properties or replacement properties close. Exeter 1031 Exchange Services, LLC can serve as your qualified intermediary in the administration of forward, reverse, improvement (construction or build-to-suit), zero equity and foreign property 1031 exchanges. Exeter Asset Services Corporation can serve as your exchange accommodation titleholder when legal title must be acquired and held or “parked” as part of a parking arrangement in a reverse or improvement 1031 exchange.
1031 Exchange Qualified Trust Accounts
A 1031 exchange qualified trust account (QTA) is a separate, segregated, dual-signature, restricted trust account established between Exeter 1031 Exchange Services, LLC as the qualified intermediary (QI), the investor and Exeter Trust Company as the trustee, to hold and safeguard the net proceeds from the sale of an investor’s relinquished property as part of a 1031 tax deferred exchange.
This qualified trust account (or qualified escrow account) is essential to prevent “constructive receipt” or “actual receipt” of the investors’ 1031 exchange funds, ensuring compliance with Section 1031 of the Internal Revenue Code, Treasury Regulations, and related rulings, and to clearly hold the 1031 exchange funds as client trust funds and not corporate funds.
IRA Custodian for Self-Directed IRAs
Self-directed individual retirement accounts (generally referred to as self-directed IRAs) are retirement accounts that provide individuals with greater control by allowing for investments in non-traditional assets, often referred to as alternative investments. Real estate, promissory notes secured by deeds of trust or mortgages, tax lien certificates, private offerings/placements, private real estate investment trusts (REITs), private equity and debt funds, and Simple Agreement for Future Equity (SAFE) are examples.
Individuals and their advisors are often frustrated by the limited asset classes administered or allowed by IRA custodians. They want more investment options and more control over the retirement account’s growth. Exeter Trust Company is an IRA custodian and can administer investors’ self-directed IRAs with a specialty emphasis in these non-traditional investments.
Custodian for Self-Directed Individual 401(k) Plans
A self-directed individual 401(k) plan (often called a solo 401(k) plan) is a retirement plan designed for self-employed individuals or small business owners with no employees (other than a spouse). It combines the features of a traditional 401(k) plan with the flexibility of a self-directed retirement account, including the ability to invest in non-traditional investments just like the self-directed IRA. Exeter Trust Company can administer your self-directed 401(k) plan, including investments in alternative assets.
Custody Services for Qualified Retirement Plans
Custody services for qualified retirement plans provide safekeeping and administration of plan assets (e.g., 401(k), 403(b), and defined benefit plans). The custodian holds the assets (including non-traditional assets or alternative investments), ensures proper segregation and settlement of trades, and performs recordkeeping, participant statements, tax and regulatory reporting, and audit support.
Private Fund Custody and Administrative Services
Private fund custody and administrative services include the safekeeping of fund assets (securities, cash, and non-traditional assets or alternative investments) by a custodian. The custodian ensures proper asset protection, settlements, and movements. The services also include fund administrative services such as investor accounting, account statements, tax reporting, cash management and treasury services, and assistance with investor communications. ExeterTrust™ commands a specialty emphasis in this service for private real estate funds, and private funds investing in non-traditional investments or alternative investments.
Directed Trust or Administrative Trustee Services
Trusts are administered by a directed or administrative trustee (Exeter Trust Company), handling the day-to-day administrative requirements of the trust such as custody of assets (including alternative investments), accounting and recordkeeping, distributions, coordination of tax filings with the fund’s tax advisor, and document management. The investment decisions are made through an investment advisor or committee and the distribution decisions are directed by a distribution committee, properly segregating administrative and fiduciary resonsibilities.
Specialty Holding Escrow Services
Specialty holding escrows, sometimes referred to as “cash holdback escrows,” is a secure arrangement where a neutral third party (such as an escrow agent, bank or trust company) holds cash, marketing securities, or specific, non-traditional assets until contractual conditions are met. Exeter Trust Company can serve as your escrow agent in specialty holding escrows or cash holdback escrows.
Cash Management Custody Services
A directed cash management custody account is a specialized financial arrangement that combines the security of a custody account (safekeeping of assets) with cash management functionality. It is designed to hold, safeguard and invest idle cash and short-term, liquid securities, offering individual, corporate and institutional investors, a centralized, secure, and optimized way to manage their liquid assets. Exeter Trust Company can hold investors’ idle funds and assist with their cash management needs.
Title Holding Trusts (Land Trusts)
A title holding trust, often referred to as a land trust (Illinois Land Trust, Florida Land Trust), is a legal trust agreement where a trustee holds legal title to real estate, while the beneficiary retains all rights of ownership, including control, use, and income from the property. It is typically a fully revocable grantor trust, allowing the beneficiary to manage, sell, or refinance the properties held in trust at any time. Investors generally use a title holding trust or land trust to buy, hold, manage, exchange and sell real property in a confidential and private manner. Exeter Trust Company can serve as Trustee of your title holding trust or land trust.