The custodian holds your retirement account. The facilitator builds the investment vehicle.
How the roles compare
| Function | Custodian | Facilitator |
|---|---|---|
| Regulatory status | Regulated bank or trust company | Document and formation service provider |
| Holds your funds | Yes, at the IRA level | No |
| IRS reporting | Files Form 5498 annually | No reporting role |
| Access to your money | Direct access to IRA funds | No access at any layer |
| Role in investments | Processes IRA-layer events, signs documents in custodian-directed accounts | Creates the entity structure for checkbook control |
| Provides | Required IRA custody | Plan documents, entity formation, implementation guidance |
What does the custodian do?
The custodian is a financial institution chartered and regulated to hold retirement accounts. IRC Section 408 requires every IRA to have a qualified custodian, which is not optional and not something a facilitator can substitute for.
The custodian handles IRA-layer events: contributions, distributions, rollovers between accounts, and beneficiary designations. It files Form 5498 with the IRS each year reporting your account value and any contributions.
In a custodian-directed account, meaning one without checkbook control, the custodian executes every transaction. Buying a rental property means the custodian reviews the purchase agreement, prepares its forms, signs at closing, and wires the funds. Rent goes to the custodian for deposit. A repair bill becomes a payment request the custodian reviews and issues. Every action flows through them, at their pace and their fee schedule.
In a checkbook control account, the custodian steps back. Once your IRA invests into the LLC or trust, the custodian records that the IRA owns that entity and its role narrows to the IRA layer. It does not approve real estate purchases, review private equity deals, or sign contracts with cryptocurrency exchanges. You handle those directly through the entity you control. Money entering or leaving the plan still passes through the custodian layer, even though individual investments do not.
What does a facilitator do?
Self-Directed Plans LLC is a facilitator. We prepare the documents that make checkbook control work: operating agreements for LLCs, trust agreements for trusts, and Solo 401(k) plan documents.
We also handle entity formation, filing Articles of Organization with the state, obtaining EINs, coordinating your custodial IRA setup, and initiating your plan's bank account application.
Custodians do not typically provide these services, and the reason is regulatory. To remain a passive custodian and avoid being treated as a fiduciary with investment authority, they stay out of entity formation and investment structuring. That gap is what facilitators fill.
We are not a custodian, trustee, administrator, or fiduciary, and we do not provide tax, legal, or investment advice. We build the vehicle. You drive it.
Frequently asked questions
Does Self-Directed Plans LLC ever have access to my plan funds?
No. We have no access to or control of your funds or your banking accounts at any point. Your IRA is held by IRA Resources, a regulated custodian. Your plan's bank account is opened in the name of your LLC or trust with you as the authorized signer. We initiate the application, you complete it with information we never collect, and you sign the account agreement directly with the bank. We have no signing authority on the account and no role once the invitation is issued.
Who is the custodian for Self-Directed Plans clients?
We work exclusively with IRA Resources, a qualified IRA custodian regulated by the South Dakota Division of Banking. We chose them for their track record with self-directed investors, their service quality, and competitive administration fees.
Can I use a different custodian?
No. Our systems are built to coordinate specifically with IRA Resources. A single custodian integration streamlines operations, improves the support we can offer across your whole plan, and is part of how our fees stay low. If you hold an IRA elsewhere, we can help you transfer it to IRA Resources during setup.
Why do I need both a custodian and a facilitator?
The custodian is required by law for every IRA under IRC Section 408. The facilitator exists because custodians stay passive to avoid fiduciary liability, so they do not create the structures checkbook control requires. They handle custody and reporting. We handle formation and implementation.
What happens if Self-Directed Plans goes out of business?
Your retirement funds would be unaffected. Your IRA is held by IRA Resources, not by us. Your LLC or trust is a legal entity you control, with its own bank account and its own documents. We prepared the documents that established the structure, but the structure exists independently of us, and you could continue operating your plan exactly as before.