Safety of Funds in Qualified Trust Accounts

Our safety protocols and banking procedures fully protect funds from misappropriation. No bond, no matter how large, will pay off in time to meet the strict 180-day time requirement of § 1031.

Protecting funds where they sit is paramount.

We do not commingle exchange funds in a general account and then control the movement of funds into sub-accounts. We only work with banks willing to provide the extra service of receiving funds directly into and wiring directly from each segregated exchange trust account.

In today’s world it is common practice to have a general account into which all proceeds are received and from which all funds are wired. Your funds are commingled with other exchange proceeds received until the QI moves them from this pooled account into a self-created sub-account. Your funds are then returned to the same general account to be wired out, which again commingles them with other exchanges. We believe this is a dangerous practice since you lose the ability to track your specific exchange funds. All defalcations in the history of 1031s have occurred when funds are pooled. General accounts eliminate transparency and open the door for misappropriation.

All Amherst accounts are governed by Qualified Trust Agreements (QTA). Based on the QTA, any instruction to move funds directly from the trust account must be signed by taxpayer, Amherst and an attorney Trustee. The majority of banks will not accept this added responsibility so by virtue of willingness, our banks are a step above by offering client-centered business practices even when they create more work and even potential liability for the bank.

Amherst is a labor-intensive bank customer for many client-centered reasons. We require preferential service, added safety procedures and a dedicated operations team of 4 minimum. Our strong relationships with numerous exchange-savvy banks lets us match the depository to the transaction. We maintain the flexibility to move funds quickly, with taxpayer knowledge and written approval, from a potentially troubled bank.

Amherst does not invest exchange funds to maximize its earnings or yours. Priority 1 is protection of principal; funds remain in transparent trust accounts throughout the exchange.

Segregated trust accounts add a layer of protection in the event of bank failure or title company bankruptcy. Funds held in trust have not been swept into bankruptcies, which keeps funds available to purchase replacement property within the 180-day time requirement.

The safe handling of hundreds of millions of dollars in thousands of exchanges, ongoing professionalism, trustworthiness and dedication to being exemplary exchange facilitators have earned Amherst the reputation that brought you to us.

Welcome to the safety and security of Amherst 1031.