It is important to review your estate plans regularly to adjust for any changes that occur, whether they are legal or personal. This year, that is especially true. The Setting Every Community Up for Retirement Act, or SECURE Act, has made substantial alterations to how certain retirement benefits and IRAs should be treated after death. This means that you should take the time to review and update your estate plan. This article on Forbes.com highlights some key points regarding these changes and why you should take the time to consider making changes to your plan.
The SECURE Act changes could possibly result in revision of beneficiary designation forms, revision of wills and trusts, possible modifications of existing conduit trusts, and complete restructuring of the planning for the IRA account. One major change that the SECURE Act brings with it is the death of the “Stretch IRA.” With this death, the ramifications will shake things up for many. The stretch technique permitted heirs to defer IRA over a long period of time, which essentially would permit the IRA balance to compound income tax free. Now, however, most heirs of an IRA dating after 2019 will be required to completely withdraw all assets within 10 years of the date of death.
There are a few exceptions to the 10-year rule. For heirs who qualify as “eligible designated beneficiaries” do not need to adhere to the 10-year payout. Those who are considered eligible designated beneficiaries are surviving spouses, chronically ill, or disabled heirs.
The SECURE Act significantly affects many estate and retirement plans, so it is critical to review your plans today. The team of legal experts at Rhodes Law Firm is ready to help ensure that your plan is structurally sound and your wishes will be upheld. Don’t wait until it’s too late – come see us today to review or create your estate and retirement plans!