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SECURE Act New IRA Rules: Change Your Estate Plan

The Setting Every Community Up for Retirement Enhancement Act of 2019, called the “SECURE Act” makes significant changes to how IRAs and certain retirement benefits must be treated post-death. Rules Committee Print 116–44 Text of the House Amendment to the Senate Amendment To H.R. 1865, December 16, 2019, the “Further Consolidated Appropriations Act, 2020.”

These changes are so significant every such plan holders should review their wishes and how their estate plans may be affected. This may result in:

  • Revision of beneficiary designation forms.
  • Revision of wills and trusts that include provisions creating so-called conduit trusts that had been intended to hold IRAs and preserve the stretch IRA benefits   while the IRA plan holder is still alive.
  • Possible modification of existing conduit trusts (defined below) that are not modified before the plan owner’s death to address how the SECURE Act might undermine the intent of that trust when the will or trust providing for it was created.
  • Complete rethinking and restructuring of the planning for the IRA account.

The SECURE Act will have a significant impact on many estate and retirement plans. The implications will vary by taxpayer and could have very different consequences depending on each taxpayer’s goals, assets inside IRAs or plans or outside them. State income tax implications should also be considered. It is also important that taxpayers evaluate options in a holistic manner considering the many ripple effects of both the SECURE Act and changes to the plan.

Complete article originally posted on by Martin Shenkman on December 25, 2019.

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