When thinking of doing a 1031 exchange, one thought that almost always goes through a client’s mind is: “How do I know my money is safe with a Qualified Intermediary when they are holding it during the exchange?”
When looking for a Qualified Intermediary, the IRS states that your QI must be an independent third party—they can’t even be your accountant or attorney. You don't want to pick just anyone, though. There is a lot to consider. The first thing to know when looking for a QI is that they are not regulated by the government. This means there are no exact rules or regulations when it comes to holding your money—it is based on trust. Remember that QI’s may be holding your money for up to 180 days. During that time, you will not be able to have access to it per rules of the IRS for a 1031 Exchange. Since you won’t be able to have access to your cash from the sale during the exchange (or if you’re in a reverse exchange, we’re talking about your newly acquired property rather than cash), you’re going to want to know where your assets are being held and how it is being protected. This is not something you want to take lightly when considering who to hire as your QI.
Being that qualified intermediaries are not regulated by the government, we understand your concerns. That’s why here at 1031 Exchange Connection, we’ve taken extra steps to keep you protected and earn your trust.
We are bonded and insured. We have gone the extra mile to obtain a bond and insure ourselves to show that your money will be safe. You can find a copy of it here on our website.
All funds are kept at strong, local banks. We are lucky to have such great banks to work with here locally in our area. They have always been a pleasure to work with, and we have developed great relationships with them over the years. We will always make you aware of which bank your funds are being held at so you know where your money is at all times.
Funds are kept in separate, non-comingled accounts. This means that each exchanger has their own FDIC insured account in one of our local, trusted banks. Your funds will never be placed in an account with another exchangers funds.
Accounts are highly protected. Our trust accounts are highly secured and password protected with tokens that change codes every 30-60 seconds, assuring access only by us. In addition, passwords are changed regularly and consistently to further ensure no one gains access to any of our 1031 trust accounts, except our treasury management personnel of course!
We are a reputable company with many years of experience. We have worked with and earned the trust of many exchangers throughout the years. That’s why we’re still here today. We look forward to working with you and earning your trust as well.
If you have any other questions about what makes us a trustable QI, please contact us. We’d be happy to speak with you.