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Retirement Plans & Engagement Letters

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4-Mar-2018 9:03pm
Near the Kwanzan cherry tree
I am mulling adding a hold harmless clause to either my engagement letters or terms and conditions addendum that absolves me of any liability from damages that a client suffers as a result of engaging in a prohibited transaction stemming from use of retirement plan funds, unless consulting on whether that particular transaction is a prohibited transaction is listed in the engagement objectives and scope section.

I am mulling this because buying rental real estate via self-directed plans seems to have gotten a lot more popular over the past few years. People see a few hundred grand or a few million in a retirement account and they want to buy property with it. Ignoring whether that's even a smart move or tax efficient (I think no and no), when they end up doing that, they're walking a tight-rope in my opinion, and they don't always tell me all of the details. I therefore view this clause as a C.Y.A. and necessary based on my client base.

Do any of you have similar in your agreements or have you considered the same?

21-Apr-2014 9:08am
Why do you think YOU would be liable for a client getting involved in a prohibited transaction? Particularly when you don't advise doing so, and client doesn't consult you first, and doesn't provide the details once it's done. That a client might want to find someone to blame for his own foolishness doesn't create any liability on anyone else.

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