February 2019 Note from the Principals

Dear Valued Client:

As we carry on into the New Year, our 15th year in business has felt like a new beginning. In 2018 we proudly announced that we became New Direction Trust Company (NDTCO). As a fully chartered trust company, we are empowered to bring our services to the next level and position ourselves for accelerated growth in 2019 and beyond. You, our loyal clients, some of whom have been with us since 2003, have our sincere gratitude as we move forward. We can’t wait to show you what comes next!

As excited as we are to be a trust company, we hope the transition thus far has gone somewhat unnoticed by you. Our goal was not to re-invent our business or complicate your investment practices. New investment purchases and assets being transferred to your NDTCO account must now be titled to reflect the change — NDTCO as Custodian FBO [Your Name] [Your Account Type] — but that’s the only operational difference you should experience in the near term.

From the day we decided to pursue a trust charter, we were committed to upholding the standards of excellence that we have championed for over 15 years. Our motivation to improve the client experience through technology and allow the broadest possible suite of alternative asset options in the self-directed retirement industry remains as steadfast as ever. Please visit our new website, www.ndtco.com, to see everything we’re working on as a trust company. Also please note that your myDirection® dashboard is fully operational per usual (though some exciting changes are around the corner!).

In the spirit of carrying on with business as usual, here are some considerations you may want to bear in mind as the end of the year approaches:

  • Have you made your maximum allowable contributions for 2018 yet? If not, you still have plenty of time to make your deposits. The IRS permits contributions for a given tax year up until the tax filing deadline, which is April 15, 2019 this year. While this is true for most accounts, others (like SEP IRAs) may accept 2018 contributions even later in the year if you file an extension with the IRS. Please visit our website for more information about 2018 and 2019 contributions.

  • Are you paying multiple IRA custodians for multiple accounts because one holds publicly traded equities and your NDTCO account holds alternative assets? Our clients can now hold stocks, mutual funds, and other such assets in tandem with their alternatives. As such, you may consolidate your holdings, simplify your retirement portfolio, and enable your publicly traded holdings to earn dividends or capital gains until/if you decide to reallocate those holdings toward a new alternative strategy.

  • Do you have a pre-tax account (a Traditional IRA, SEP IRA, etc.) and rapidly appreciating assets that you intend to eventually distribute in kind? With a Roth conversion, you can pay taxes on those assets now, convert them to a post-tax status, and allow them to grow tax-free from that point forward. Qualified Roth distributions carry no tax implications. If, for example, your Traditional IRA holds a property worth $100,000 and you decide to convert your account, you would pay taxes on that $100,000 value as if it were income. However, if that property appreciates to $250,000 once in your Roth IRA, you could distribute the asset in kind (or sell it and distribute cash) without any income tax concerns related to the $150,000 value increase that occurred after the conversion. For Roth distributions to be tax-free, account holders must be at least 59 ½ years old and it must have been at least five years since their first Roth contributions. Please remember that, as of October 2018, re-characterizations of Roth conversions are no longer permitted.

  • Will you turn 70 ½ in 2019? Familiarize yourself with required minimum distribution rules as you prepare to take IRS-mandated withdrawals from your account. Please visit our website for more information about distributions.

  • Year’s end can also present a good opportunity to review your account and make updates as needed. If your contact information has changed or you need to revise your beneficiaries, please feel free to contact our office.

From all of us at New Direction Trust Company, thank you again for your continued support. We hope 2019 will be a lucrative year for your self-directed retirement!

Sincerely,

Catherine Wynne & Bill Humphrey

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