Revisit Your Estate Plan In Light Of New SECURE Act

Revisit Your Estate Plan In Light Of New SECURE Act

The SECURE Act is in Effect.

At the end of 2019, the Setting Every Community Up for Retirement Enhancement (SECURE) Act was passed into law. Everyone who has a retirement plan such as an IRA or 401k will be affected by this law as of January 1, 2020.

It may be in your best interest to talk with your financial advisor and/or estate and asset protection advisor to see how this new law affects your plans for the distribution of your assets upon your death. You may want to make some tweaks.

Most affected, in what may be considered a negative way, will be non-spouse inheritors of retirement plans. According to the old law, retirement accounts could be distributed over the lifetime of the non-spouse inheritors. Under the SECURE act, the funds must be distributed within 10 years of the original owners death along with the required taxes.

Allowable Disbursements

Another significant fact is that the new SECURE Act allows expenditures from retirement plans for childcare and other qualified expenses with a year of birth or adoption without the usual penalty. It also allows certain penalty-free withdrawals to pay off student loans. And, importantly, in light of the fact that many people of retirement age are continuing to work, the SECURE Act now allows those saving for retirement to defer required minimum distributions (RMDs) until age 72 instead of age 70 ½ and allows individuals to continue making contributions after age 70 ½ so retirement savings can continue to grow.

If you expect to inherit a retirement account this year or expect any other significant life changes that will affect your retirement account, give us a call to review your estate plan. Reviewing your estate plan is always a great thing to do at the start of a new year.