Effective as of January 1, 2020, The Setting Every Community Up for Retirement Enhancement Act (the “SECURE Act”) makes significant changes to how IRAs and certain retirement benefits must be treated post-death. These changes are so significant every such plan holders should review their wishes and how their estate plans may be affected.

While there are many changes affecting a variety of tax laws, the most talked about change of the SECURE Act is the death of the so-called “stretch IRA” for most beneficiaries inheriting IRAs after 2019. Most of those inheriting an IRA after 2019 will be required to withdraw the account in full within 10 years after a plan participant’s death. It would seem that this might enhance tax revenues to the tax authorities as contrasted with the long stretch periods that had previously been available.

The SECURE Act changes how many current beneficiary designations may be implemented as well as the impact the designations may have on tax liability. Thus, some plan participants will lose some control over their planning options, and most beneficiaries will pay income tax on an accelerated basis and at higher rates.

Everyone with a retirement account is encouraged to review current beneficiary designations and estate planning documents, particularly plans involving trusts as retirement plan beneficiaries. Thoughtful estate planning strategies implemented now can help mitigate some of the impact of the SECURE Act.

Tardiff & Saldo’s experienced San Luis Obispo estate planning attorney can help you mitigate the impact of the SECURE Act with estate planning strategies in SLO county. Contact us today at info@tardiffsaldo.com.