What’s in a Name? A Lot, When it Involves Titling Your Investment

By Elsie Dudukovich2 Comments

Mark Twain is quoted as saying “The difference between the right word and the almost right word is the difference between lightning and a lightning bug.” The same could be said when it comes to your IRA holding title for an asset.  

Correct titling shows the investment is held in the IRA.  Sole ownership titling can be considered the most common type of titling.  It is used when your IRA is the only owner of the investment.  When your IRA will share ownership with at least one other person/entity, multiple ownership titling or co-ownership titling is used to show the percentage of ownership for all holders of the asset.

Correct titling shows the percentage of ownership of an asset held in your IRA. In addition to reinforcing IRA funds were used for investment purposes, the percentage of ownership the IRA holds determines the percentage of funds that need to go out of the account for investment related expenses and return to the account as investment income and proceeds of sales.  When your IRA is the sole owner of an asset, 100 percent of expenses and income flow in/out of the IRA.  In the case of co-ownership,  funds coming in and out of the IRA must also follow the percentage of ownership and be split accordingly.

Let’s take a look at some titling samples.

Sole Ownership Titling:
For traditional, Roth, SEP, and SIMPLE account types, the titling should be worded as:
  • Equity Trust Company Custodian FBO client’s name/account number IRA
For Beneficiary accounts, the titling should be worded as follows:
  • Equity Trust Company Custodian FBO client’s name, Beneficiary FBO deceased individual’s name (deceased) IRA
Co-Ownership Titling:
For traditional, Roth, SEP, SIMPLE plans, the titling should be worded as follows:
  • Equity Trust Company Custodian FBO client’s name/account number IRA, XX% Undivided Interest and Other Investor’s name, XX% Undivided Interest
For Beneficiary accounts, the titling should be worded as follows:
  • Equity Trust Company Custodian FBO client’s name, Beneficiary FBO deceased individuals name (deceased) IRA XX% Undivided Interest and Other Investor’s name, XX% Undivided Interest
If you hold a qualified plan with Equity Trust, your investment titling will follow along similar lines as described above for sole or co-ownership titling, but there are some possible differences depending on the specifics of the plan.  Reach out to our Client Services Team for guidance on proper titling.

Taking care to have the supporting documentation showing the correct titling for your IRA’s investment from the start of the investment purchase can help make the process smoother.  Our Investment and Client Services teams are happy to help you determine what titling is needed for your asset.