January 24, 2020

Edited 05/19/20

Estate Planning Tips Under the SECURE Act

Estate planning takes time and careful tax calculations when passing your estate. Under the SECURE Act, an IRA account now must be fully distributed within 10 years of the account holder’s death. This is a change that will impact millions of Americans’ estate plans. However, we provide alternative options to prolong your hard-earned accounts for your heirs. 

Continue to “Stretch” Your IRA to Certain Beneficiaries

Although the stretch IRAs is no longer an option for non-spousal beneficiaries, some beneficiaries can still “stretch” the IRA.

  • Surviving Spouse
  • Minor Child of Account Owner
  • Disabled Beneficiary
  • Beneficiary Whose Age is Within 10 Years of Account Holder (i.e. a sibling)

Your Trusts Needs to be Reviewed

Trust rules will still apply. However, trusts will have to be reviewed to determine the effect of the 10 year distribution period. Unfortunately, the IRS has not given context on how trusts will be taxed during the 10 year period.

What Can You Do Now for Your Estate?

  • Consider a Roth Conversion that can be passed to your beneficiaries without paying tax after the 10 year distribution.
  • Update your beneficiaries.
  • Consider spending your IRA first and passing your taxable account down.
  • Purchase life insurance to cover lost to income taxes.