The SECURE Act is designed to help address many of the current issues related to retirement in the united states. This could have significant implications for your current estate plans.
From a taxpayer’s perspective, there is both pros and cons associated with the Setting Every Community Up for Retirement Enhancement Act of 2019. More employees are able to save for retirement and many small employers are more easily able to create 401(k) retirement plans under this new law.
However, the one of the biggest downside of the SECURE Act is the elimination of the stretch out IRA, which was enjoyed by death beneficiaries who were not spouses who inherited individual retirement accounts or 401(k) retirement plans. The stretch out tax deferral rules are still applicable for 401(k)s and IRAs that were inherited before 2020. Under the new law, however, the vast majority of death beneficiaries who were not spouses require to get full distribution of the inherited IRA within no more than 10 years after the death of the original account holder.
If you are curious about how this process applies to you and whether this impacts your estate planning, schedule a consultation with a dedicated estate planning lawyer today.