The Secure Act was passed into law last week as part of the deal to keep the government open and funded.
For Estate Planning news of some importance and your planning, this may be a significant piece of tax planning thrown into the soup. The new law that was passed greatly shortens the time allowed to withdraw money from an inherited retirement plan. I have blogged about this anticipated change, known as the Secure Act. I have also written about the importance, until now, of planning that will allow someone to leave money growing in an inherited IRA, or providing for a “Stretch IRA”.
What passage of the Secure Act means is that if with large amounts in retirement plans, you will want to rethink your withdrawal strategies and beneficiary provisions. We are sorting out the details: spouses and some disabled beneficiaries may be able to continue to prolong withdrawals. Others will need to take all funds out within ten years, instead of over their lifetime. What this means is that for those with large amounts in retirement plans, you will want to rethink your withdrawal strategies and beneficiary provisions. These will involve developing thinking with both your financial advisor and estate planning attorney.
For those concerned about the impact of this on your planning, I suggest you start with reading the blogs linked above.
The costs of this tax will be borne by the children of middle-class wage earners, as, by and large, IRA funds were built from withholdings accumulated over many paychecks.
I know there is already more than enough to do in 2020. I just wanted to keep you informed of this new law. We are planning to invite you to some webinars on the Secure Act and on other topics in the upcoming year. Check this blog for developments.
From all of us at the Downs Law Firm, we hope you and yours have a blessed Holiday Season and start of the 2020s.