The QI Shield: Future-Proof Your Profits

We are pleased to introduce Bill Exeter, CEO of Exeter 1031 Exchange Services, LLC as one of our nationwide investment expert partners. As a leading national provider of comprehensive 1031 Exchange services, Bill Exeter has contributed the following article from his 1031 Exchange Guidebook on our website to provide valuable insights for investors in the area of 1031 Exchanges.

The Role of the Qualified Intermediary

A professional, experienced, knowledgeable and financially safe, sound and secure Qualified Intermediary (“QI”) like Exeter 1031 Exchange Services, LLC, is critical to structuring and completing a successful 1031 Exchange transaction. Your Qualified Intermediary is responsible for a number of important roles in the administration of a successful 1031 Exchange transaction, including: 

(1) Preparing the 1031 Exchange agreements and related transaction documents to properly structure the 1031 Exchange; 

(2) Receiving, holding and safeguarding your 1031 Exchange funds throughout the transaction in separate, segregated Qualified Trust Accounts; and 

(3) Consulting with you and your professional advisors regarding the implementation of your 1031 Exchange transaction to ensure compliance with all applicable Internal Revenue Codes, Treasury Regulations and related Revenue Rulings and Procedures. 

Entrusting your 1031 Exchange funds to a Qualified Intermediary prevents you from having access to (actual receipt) or exercising control over (constructive receipt) your 1031 Exchange funds or assets, which would disqualify your 1031 Exchange transaction.

Choosing a Reliable Qualified Intermediary

The Qualified Intermediary plays a critical role in the 1031 Exchange process. This is especially true when it comes to holding, managing and safeguarding your 1031 Exchange funds. The safety of your 1031 Exchange funds should be the most important part of your due diligence process. Therefore, it is crucial that you thoroughly evaluate prospective Qualified Intermediaries. 

Understand that Qualified Intermediaries, in general, are not licensed, regulated, audited, required to be insured or bonded or have any minimum equity capital requirements. The Exeter Group of Companies, however, chose to be licensed, regulated and audited by the Wyoming Division of Banking through the launch of Exeter Trust Company. 

We recommend that you consider the following risk criteria prior to selecting a Qualified Intermediary: 

(1) The protections provided by being licensed, regulated, and audited, with minimum equity capital requirements through proper regulatory oversight; 

(2) The technical expertise and experience of the Qualified Intermediary; 

(3) The level of protection provided by the Qualified Intermediary’s errors and omissions insurance coverage, which protects you against possible mistakes made by the Qualified Intermediary; 

(4) The level of protection provided by the Qualified Intermediary’s fidelity bond coverage, which protects you from potential theft or embezzlement of your 1031 Exchange funds by the Qualified Intermediary; and 

(5) The practice of using separate, segregated Qualified Trust Accounts or Qualified Escrow Accounts to ensure that your 1031 Exchange funds are protected by law as client trust funds and not corporate funds of the Qualified Intermediary. 

An experienced and professional Qualified Intermediary will understand these concerns and will be happy to discuss these issues with you. Prudent Qualified Intermediaries, like Exeter 1031 Exchange Services, LLC, will have already evaluated the applicable risks, addressed the critical issues, and implemented appropriate safeguards such as regulatory oversight to protect your 1031 Exchange funds to ensure the successful completion of your 1031 Exchange transaction.

Safeguarding Your 1031 Exchange Funds

Protecting your wealth is our highest priority. We have the expertise and experience to help you and your legal, tax and financial advisors successfully navigate the complexities of a 1031 Exchange transaction. While you are working on researching your next move, you can rest assured that your money is protected via the safeguards we have implemented on your behalf.

Regulatory Oversight Ensures Safety, Soundness and Security

Exeter 1031 is one of the most safe, sound, and secure Qualified Intermediaries today. We chose to proactively go through a rigorous multi-year regulatory review and approval process to obtain a trust company charter and become a regulated entity to better protect clients’ 1031 Exchange funds. Exeter Trust Company is licensed, regulated, and audited by the Wyoming Division of Banking. Exeter 1031 deposits, holds, and safeguards clients’ 1031 Exchange funds in separate, segregated Qualified Trust Accounts with Exeter Trust Company to better protect clients.

Bonding, Insurance and Equity Capital Provide Financial Strength and Stability

In addition to our regulatory oversight, extensive experience, expertise and depth of technical knowledge, we maintain significant levels of financial strength, including regulatory required equity capital, bonding and insurance, providing the safety, stability and resources necessary to successfully and safely administer your 1031 Exchange transaction. 

Your 1031 Exchange funds are bonded, insured and protected with a multi-million dollar fidelity bond (per occurrence) and errors and omissions insurance policy, financial institution blanket bond, general liability insurance and significant regulatory required equity capital. We would be happy to provide evidence of our bonding and insurance coverage to you.

Qualified Trust Accounts Protect Clients' Funds

Your 1031 Exchange funds are deposited, held, and safeguarded in separate, segregated Qualified Trust Accounts through Exeter Trust Company. Qualified Trust Accounts ensure that your 1031 Exchange funds are protected by law as client trust funds and not corporate funds of the Qualified Intermediary.

Internal Process Controls and Risk Management

The Exeter Group of Companies has established a multi-layered process that includes process controls, validations, daily reconcilements, audits, and reviews to ensure we deliver on our promises and meet our obligations and responsibilities. Nothing escapes our attention in any transaction.

We hope the insights provided by Bill Exeter of Exeter 1031 Exchange Services, LLC in this article have been informative and beneficial. We at CBC Capital Advisors are proud to partner with such a distinguished firm. Together, we are committed to facilitating a seamless 1031 exchange process for our clients. Our collaboration ensures that you receive comprehensive support and guidance, making your exchange experience as smooth and efficient as possible.

For the past 40+ years it has been our honor and pleasure to help clients achieve their investment goals through commercial real estate investing through…

  • Our Exclusive Nationwide Investment Network
  • Off-Market Commercial Real Estate Opportunities – Nationwide
  • and Saving Taxes with 1031 Exchanges

To Learn More, Give CBC Capital Advisors a Call at (806) 793-0888

In addition, you can learn all about our exclusive nationwide investing network and capabilities by watching Rick Canup’s short investment presentation below.