Secure Exchange Processing

Secure Facilitation Your Exchanger Checklist

Planning and Advice

Since tax deferred exchanges involve a minimum of two properties, and often many more, they include some extraordinary logistics because of the necessary multiple closings and the difficulties associated with many transactional moving parts. For this reason, and because a significant amount of deferred gain treatment is at stake, every exchange deserves to be planned by the Exchanger beforehand.

It usually only takes a few minutes with a Fyntex 1031 exchange professional for an Exchanger to theoretically walk through the entirety of the exchange logistics before starting. This type of pre-planning can often assist an Exchanger in avoiding several exchanging pitfalls and create workarounds or mitigation strategies before any problems can arise.

Secure Facilitation Your Exchanger Checklist

Is Your Personal Data Secure?

The online world in which we live today can be dangerous. Especially for those involved in the sale and transfer of real estate. Your personal data is always at risk of being hacked or compromised, and it is even more risky to allow the transport of your personal data across free email platforms like Gmail and Yahoo.

Frankly, this is one of the primary rationales we utilized when we built our original processing platform in 2018. We encourage every Exchanger to insist that your exchange is processed within a fully encrypted environment, to ensure that no data is ever at risk. We also suggest that you insist that your trust account is set up your in your name and that you have access to it, so you can log in to a secure ecosystem where you can safely interact with your exchange documents, view your trust account activity, or communicate with your 1031 Coordinator.

Secure Facilitation Your Exchanger Checklist

Are Your Exchange Funds Secure?

For many years, Qualified Intermediaries commingled the exchange proceeds of their Exchangers and provided for the sub-accounting of individual Exchanger balances on their own books. Over time, as banking software became more sophisticated, it was possible to set up individual accounts for the benefit of Exchangers (FBO), however the accounts were always in the name of the Qualified Intermediary and never required the approval of the Exchanger to transfer any exchange funds.

One step forward for 1031 Exchangers was the introduction of Qualified Escrow Accounts or QEAs. This is essentially a three-party agreement between the bank, the Intermediary and the Exchanger which ensures that a bank officer must sign off for the transfer of any 1031 funds. This was a dramatic step forward for Exchangers, but has been utilized very rarely because of the traditional extra $500 expense of setting up the individual QEA at the bank.

A New Paradigm, Full FDIC Insurance

If an Exchanger does not opt for the extra expense associated with a Qualified Escrow Account they should insist upon a Qualified Intermediary like Fyntex who uses a banking structure that can be trusted. The Fyntex 1031 banking regimen includes two unprecedented aspects that create absolute security for your exchange funds. One, every trust account is set up in each individual Exchanger's name, and with their tax identification number. Secondly, Fyntex has uniquely qualified to offer full FDIC insurance deposit covereg efor every 1031 exchange dollar on deposit. This insures all your exchange deposits well past the traditional $250,000 threshhold. Fyntex further requires that every Exchanger must provide written disbursement instructions, usually provided through secure e-signature for the wiring or movement of any 1031 funds.