Trusts & Estates

By: Frank Selden, Esq.

This article is directed to entrepreneurs financing new or existing businesses using their own retirement funds, a funding mechanism called a Roll-Over Business Start-up (ROBS). Opinions about the legal validity of the ROBS strategy range from blatantly illegal, to so complex that it needs to be avoided, to so easy an entrepreneur just needs pay a particular company and sign a few forms. There is no specific, single rule that delineates a ROBS approach and no rule that prohibits it. Rather, the strategy uses regulations from several sources which, when pieced together in the right framework, allows individuals to invest their own retirement funds into a corporation that is the sponsoring employer of a properly drafted 401(k) plan.

To learn more about the constraints of using ROBS, proper structure, reasons to use ROBS funding and reasons against, and the top three mistakes that are made, please complete the form below.