How SECURE is your estate plan?

SECURE Act

Secure Act may significantly impact your beneficiaries.

Effective January 1, 2020, the Setting Every Community Up for Retirement Enhancement Act (known as the
“SECURE Act”) will impact many individuals with retirement plan assets. Now is the time to review your estate plan
and consider how these changes will impact your retirement savings and estate plan.
The top three changes are:

  1. Elimination of the ‘Stretch’ provisions for most non-spouse beneficiaries of defined contribution plans and IRA accounts.
  2. Increase in the required beginning minimum distribution (RMD) age for retirement accounts from 70½ to 72.
  3. Repeal of the maximum age for traditional IRA contributions.

Other changes to note:

The SECURE act also has provisions:

  • providing larger tax credits for small business owners who establish a retirement plan,
  • encouraging annuity involvement in retirement plans, and
  • providing greater access to employer retirement plans for long-term part-time employees and home healthcare workers.

While most of the SECURE Act relates to retirement, there are plenty of changes that do not.

Expansion of 529 Plans. Under the new law, higher education expenses now include fees, books, supplies, and equipment required for participation in a registered apprenticeship program. Also, up to $10,000 may be distributed tax-free from a 529 plan for payments toward student loans of the designated beneficiary.

Kiddie Tax changes. The SECURE Act reverts the Kiddie Tax (tax of a child’s unearned income) back to the rules that were in effect prior to 2018, with the kiddie tax calculated at the income tax rates of the child’s parents, rather than the trust income tax rates. This change is retroactive, applying the new law to tax years 2018 and 2019.

We’re here to help.

If you have significant retirement plan assets, meet with your estate planning attorney to determine if the SECURE Act affects your planning to review your estate planning documents and beneficiary designations. We will work to ensure that your estate plan properly accounts for changes in the law and provides peace of mind for you and your family. Contact any of our Trusts & Estates attorneys and find out more about the services we offer at: https://www.bdblaw.com/practices/trusts-estates/. You can reach the Trusts & Estates Practice Group Chair, Ron Wayne, at 216.615.7349 or [email protected].

About Buckingham, Doolittle & Burroughs:

Buckingham is a corporate law firm that counsels Middle Market executives and business leaders all over Ohio and beyond. With offices in Akron, Canton and Cleveland, Buckingham offers clients Business Law Reimagined through sophisticated and practical legal services. Serving the region for over 100 years, Buckingham’s mission is to deliver meaningful experiences through the practice of law, exceed expectations in terms of service, counsel and business sense, and to offer continuous value to the industries, communities and clients they serve. Visit bdblaw.com to learn more.

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