Reasons To Hire a Fiduciary Consultant for 721 Exchanges

A 721 exchange is a capital gains tax-deferment tool that helps investors relinquish property control held for business or investment means. They require specific rules and guidelines to follow to perform a successful exchange. So, here are reasons you should hire a fiduciary consultant for 721 exchanges.

Qualifications and Benefits of 721 Exchanges

When you pursue a 721 exchange, you must follow specific rules to qualify. Firstly, to exchange for another property, it must have equal or a greater value than the selling property. Furthermore, you must have a qualified intermediary to complete the exchange. You must also meet the 721 exchange within a specific time frame (45 days for finding a replacement property and 180 days for purchasing the replacement property), and the investors must notify the IRS to complete a 721 exchange.

It’s known that the 721 exchange comes with many benefits. For instance, you can diversify your portfolio by purchasing REIT shares containing properties in various locations, making risk management easier. Furthermore, 721 exchanges make for an excellent passive income opportunity and effective estate planning after passing.

Reasons To Hire a Fiduciary Consultant

Hiring a fiduciary consultant for 721 exchanges can result in a positive experience. Firstly, they are an excellent resource for learning about investment practices. You can learn vital skills and take advice about discussions regarding social security, insurance, estate planning, etc. Furthermore, fiduciaries can help create plans and offer knowledge during complex decision-making.

Fiduciaries can also act as a liaison with brokers or money managers who trade securities, such as mutual funds and certificates of deposit. They also work with the estate- and trust-planning layers or accountants on your behalf, so you don’t have to stress over the more minute details.

Fiduciary Consultant Questions

Before hiring a fiduciary consultant, you must prepare questions to know if they fit your financial needs. Firstly, asking about their pay can help you avoid conflicts of interest. Focusing on advisors with fee-only services might charge an asset percentage that they manage for you, typically about one percent hourly or flat fees.

Secondly, inquiring about their qualifications can help you grasp their level of expertise and experience. You can access the Financial Industry Regulatory Authority’s professional designation database to find fiduciary background information. This includes checking professional statuses, educational requirements, designation accreditations, etc. Finally, ask questions about their investment philosophy to see if they align with your interests and values.

Fiduciary consultants can help tremendously in pursuing a 721 exchange. Ensuring that you remain prepared to ask the right questions and that they help support your goals can lead to financial benefits.

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