In late 2019 Congress passed the Secure Act which represents some of the most significant changes to IRAs and qualified retirement plans since 2006. One of the most important and far reaching of these is the elimination of the opportunity to receive distributions from these accounts over the course of the beneficiary’s life.
Many people might not have realized the updates this called for in their estate plan but there are critical steps that IRA owners and QRP participants should take when considering the potential impact of these changes on their estate plan. Primarily, IRA owners and QRP participants should first review all contingent and primary beneficiary designations for IRAs and QRPs.
The second step of this is to review any trust that is named as a contingent or primary beneficiary, including trusts for a spouse, trusts for non-disabled adult children, trusts for minor children and any special needs trust for a mentally or physically impaired beneficiary.
The review should be completed by an experienced estate planning attorney who is familiar with the impacts of the Secure Act and can help guide you through this process of figuring out what to do next. The support of an attorney is instrumental in adapting your estate plan to necessary changes.
An IRA account manager can also help you when you need to update your beneficiary designations. Any time that you make changes to your overall estate strategy, that information should be shared with your IRA account manager, too, so that these forms can be update.