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Important SECURE Act Information

Important SECURE Act Information

April 27, 2023


You may have heard about the SECURE Act. The SECURE Act significantly impacts traditional estate planning for retirement plans in that it necessitates a 10-year payout for retirement accounts after your death.

We’ve found that many of our clients have been significantly impacted by the SECURE Act, but we’ve also found that there are a number of planning techniques that can mitigate the harsh impact the SECURE Act is creating. I’d like to schedule a time when we can meet and discuss some of these in more detail:

  • Before the SECURE Act went into effect, planning techniques made it possible to “stretch” IRA withdrawals over the beneficiary’s lifetime, using the IRS’s life expectancy rules. Now, the SECURE act requires that most IRA and qualified retirement plan beneficiaries receive the proceeds of an inherited account within 10 years of the account holder’s death. This means that your beneficiaries will likely have to pay more taxes than if the stretch option were still available.
  • If you have used trusts for your retirement account beneficiaries, it is important to revisit those trusts in light of the new rules. Trusts that were commonly used before the Act went into effect can potentially create undesired results under the new 10-year payout rule. I can work with your attorney to help ensure that your estate plan is updated in light of the Act’s passage.
  • The good news is that there are planning techniques that can help mitigate the impact of the SECURE Act, including: 1) completing a Roth Conversion; 2) leaving all or a portion of your retirement account to a Charitable Remainder Trust; 3) naming a charity as beneficiary of your retirement account; and 4) utilizing life insurance to pass more wealth to your heirs. I can help you and your attorney decide which approach(es) could be right for you.

My office will be in touch soon to set up a time that’s convenient for us to meet so we can discuss how your estate planning has been affected by the SECURE Act — and what you can do about it.

1 Guardian, its subsidiaries, agents, and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation

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