| Role | When Active | What They Can Do |
|---|---|---|
| Person of authority (you, by default) | Now | Full signing authority: contracts, bank account, buying and selling entity assets |
| Co-authority (often a spouse) | Immediately, alongside you | Same signing authority as you, starting now |
| Successor | Only when no one currently holds that authority | Same signing authority, activated by your incapacity or death, or your co-authority's if none remain |
| Beneficiary | After the entity is wound down | Inherits plan value; no administrative authority unless also named to a role above |
What is a person of authority?
Whoever can sign for your entity, its contracts, its bank account, its ability to buy and sell what it holds, is its person of authority. You hold that role by default the moment the entity exists. Your plan documents call this person the manager if you're structured as an IRA LLC, or the trustee if you're an IRA Trust; this article uses person of authority as a single term for the same underlying role, since it works the same way regardless of which structure you have.
Can you share that authority with someone else right now?
Yes. Naming a co-authority, often a spouse, grants someone else the same full signing power starting immediately, alongside you. They can act on the entity's behalf today, not just in some future scenario.
What if no one currently holds that authority?
This is what a successor solves. A successor holds no authority at all while you're active; it stays in reserve until the moment nobody currently can act, whether that's because you've become incapacitated, you've died, or your co-authority is no longer available either. At that point, the successor's authority activates and the job is entirely administrative: winding down or transferring the entity, signing whatever needs to be signed, liquidating assets if needed, and getting plan value into the hands of your beneficiaries.
Do you need a successor if you already have a co-authority?
Yes, and it's worth naming one either way. A co-authority solves the problem while at least one of you is active, but it doesn't solve what happens if that person predeceases you, or if something happens to both of you at the same time, a real risk when your co-authority is a spouse and a single event could affect you both. A successor is what covers that gap.
It's also worth being clear that none of these roles determine who inherits anything. A successor or co-authority doesn't gain ownership by virtue of the title; that's decided separately by your beneficiary designation. The same person can hold both an authority role and be a beneficiary, that's common, but nothing requires it, and naming beneficiaries for your IRA is its own decision worth making at the same time.
What happens if you name neither?
The entity doesn't disappear when authority runs out. It continues to exist until someone properly winds it down. Without a successor in place, a beneficiary can eventually step into that role, but the process takes longer and gets genuinely complicated, particularly when the plan holds illiquid assets like real estate or a private note that can't be settled with a phone call.
Who should you choose, for either role?
Whoever holds this authority, co-authority or successor, has full signing power over the entity: its bank account, its contracts, its ability to sell what it holds. That's not a role for whoever's most convenient to list. Look for someone you trust without reservation who's realistically capable of handling it: comfortable with paperwork, willing to work with your CPA or attorney, and not intimidated by an asset like a rental property that doesn't wind down as cleanly as a stock sale. If nobody in your life fits that description, naming a professional, an estate planning attorney experienced in this kind of administration, is a perfectly sound alternative to stretching a family member into a role they're not equipped for. You can add or remove either role at any time by resolution of the LLC or trust, so this isn't a choice you're locked into.
Why does documentation matter so much here?
Whoever holds this authority can only act on what they can find. This is really the core of succession planning for a self-directed plan: document what the entity holds, where the records are kept, and who your key contacts are, IRA Resources, your attorney, your CPA, so that whoever steps in isn't starting from scratch. Keep that documentation current as your holdings change, the same way you'd keep a beneficiary designation current. Authority with no records to act on is functionally the same problem as no authority at all.
Frequently asked questions
Can the same person hold more than one of these roles?
You can name someone you designate as either a co-authority or successor authority as a beneficiary as well. Holding an authority role doesn't grant or limit inheritance in any way, that's decided separately by your beneficiary designation, so pairing either role with beneficiary status is common and creates no conflict.
If I already have a co-authority, do I still need a successor?
It's worth having both. A co-authority only covers the time while at least one of you is active; a successor is what activates if neither of you can act, including the case where you both become unavailable at once.
What happens to the entity itself when I die?
It keeps existing until it's properly wound down or transferred. It doesn't automatically dissolve, and someone, ideally whoever holds authority at that point, has to actively administer that process.
Can I change who holds either role later?
Yes, at any time, by resolution of the LLC or trust. There's no special form or waiting period.
Do I need a lawyer to name a successor or co-authority?
Not for the appointment itself; that's handled by resolution of the entity, not a court filing. If your broader estate plan is more complex, coordinating with an attorney makes sense, but naming either role doesn't require one on its own.
Next steps
If you haven't documented what your plan actually holds and where those records live, that's the more urgent gap to close first, since authority without records to act on solves nothing. Once that's done, confirming who actually receives the plan's value is a separate decision worth revisiting at the same time, and knowing what your beneficiaries can expect once the transition happens helps you choose someone who can guide them through it.