Haven Exchange has taken the pioneering step of proving that every exchange has its very own completely segregated, 100% liquid, FDIC insured money market account at Union Bank of California.
Each account is a dual signature, qualified escrow account.
Every client receives a statement directly from Union Bank of California each month, reflecting the activity and balance, including interest earned for their individual 1031 Exchange account.
Other Qualified Intermediaries pool the exchange funds into one big account, so they can invest it in instruments that pay more than the prevailing interest rates the banks pay. AND THEY KEEP THE DIFFERENCE AND MORE.
Fidelity Bonds have a "per occurrence" qualifier. An occurrence may be one employee misappropriating funds from an account over the course of a year. Having a separate account for your funds means each account has 10 million dollars in Fidelity Bond coverage. If you expect to exceed that in exchange funds, call us and we will increase the bond.
It is of note that while many Qualified Intermediaries claim that each exchange has a separate bank account, no one but Haven Exchange proves it with the monthly statement from the depository bank.
If they really open separate accounts for each exchange, where is the monthly bank statement?
Their own internal sub-accounting is not the same as or equal to an actual separate account at the bank, yet they try to make you think that it is.
Is that not some reflection of who they really are?
For your security, at Haven Exchange, two signatures followed by a changing, randomly generated encrypted security code are required for any release of your 1031 funds.
The questions to ask prospective qualified intermediaries:
1. Will I get a statement from the depository bank each month reflecting all activity? Does the total amount of exchange funds on deposit exceed the coverage of your (the Intermediary's) Fidelity Bond? Provide a written guarantee, please. If they tell you that the company is backed up by the Title Company with which they are affiliated, ask them to fax you the instrument that accomplishes this. Read it.
2. Do the growth proceeds accumulate in the same account with the principal? Do you (the Intermediary) retain a portion of these growth proceeds? If the answer to both questions is “yes”, then the intermediary is commingling exchange funds with its own, potentially making all the exchange funds they hold vulnerable to seizure in the event of a bankruptcy, lawsuit or judgment, etc.
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