29 Jan SECURE Act – Changing the Landscape of Retirement Planning
INDIANAPOLIS – 2020 has set a new precedent with the passing of the Setting Every Community Up for Retirement Enhancement Act (“SECURE Act”). This new legislation establishes some of the most significant changes to retirement planning in over a decade.
Since the passing of the SECURE Act, there is now a statute that requires that most beneficiary(ies) must withdrawal all assets from qualified inherited retirement accounts within 10 years of the passing of the original account owner. This abbreviated timeframe can cause an increased tax consequence to the beneficiary(ies). Before the SECURE Act, the beneficiary(ies) were able to extend the duration of their distributions from the inherited qualified retirement account throughout their lifetime creating a “stretch” IRA, giving them the ability to stay in lower tax brackets.
Eagle and Fein, P.C., in conjunction with the Eagle Wealth Planning Institute, hosted multiple educational seminars for financial advisors to provide a deeper understanding of how the new legislation will affect clients and their desire to provide tax-savings or asset protection to their beneficiaries. The SECURE Act Seminar examined three potential strategies to accomplish planning goals: the conversion of Traditional IRAs to Roth IRAs, the relocation of Traditional IRAs to Life Insurance policies, and establishing Testamentary Charitable Remainder Unitrusts (“T-CRUT”).
Brian A. Eagle and Carol J. Greer, attorneys for Eagle & Fein, P.C., discussed with the Central Indiana Community Foundation’s (“CICF”) Sarah Weaver, who also attended the SECURE Act Seminar, the exciting opportunity the IRA participants have to create and use T-CRUTs as a strategy to provide an extended timeline of distributions to the beneficiary(ies). Brian, a member of the CICF’s Cornerstone Council, and Carol, a member of the Professional Advisor Leadership Council, have provided further details in the CICF’s article “Understanding the SECURE Act” article, which is readily available here.
It is important for actively employed workers and retirees to revisit their retirement and estate planning strategies to make sure their designated beneficiary(ies) on record match the planning objectives of the participant.
If you would like to review your estate plan to ensure you are giving what you want to whom you want, the way you want, and if possible save on tax consequences to your loved ones, please contact Eagle & Fein, P.C. at (317) 726-1714.