We at Hellmuth & Johnson hope that you and your family are healthy and well. During this unsettled time, as we endure the “new normal” of living with the unfortunate COVID-19 pandemic, there is a good opportunity to put ones legal and financial affairs in order. It is an essential and perfect time to review your current estate plans and suggest to family and friends to get one in place, if they do not have one.
Some of the key parts of an estate plan are a Power of Attorney, Health Care Directive, Will, Trust and other Transfer on Death documents. We encourage you to dust off your plans and review them to see if they are in need of any updates (i.e. change of agents, trustees, beneficiaries, distributions, etc.). If you have retirement accounts, there may also be a need to update your estate plan as the law has changed.
On December 20, 2019, President Trump signed the Setting Every Community Up for Retirement Act (SECURE Act). The SECURE Act has several positive changes: It increases the required beginning date (RBD) for required minimum distributions (RMDs) from your individual retirement accounts from 70 ½ to 72 years of age, and it eliminates the age restriction for contributions to qualified retirement accounts. However, perhaps the most significant change will impact the beneficiaries of your retirement accounts: The SECURE Act requires most designated beneficiaries to withdraw the entire balance of an inherited retirement account within ten years of the account owner’s death, but there are exceptions to this new mandatory ten-year withdrawal rule.
More specifically, spouses, beneficiaries who are not more than 10 years younger than the account owner, the account owner’s minor children, disabled individuals, and chronically-ill individuals may receive tax and withdrawal treatment substantially similar to the previous law. However, such preferable treatment likely requires that your estate planning documents be specifically tailored to conform to the SECURE Act. Proper analysis and evaluation of your estate planning documents and your intended beneficiaries’ current and anticipated circumstances are imperative to ensure your wishes are accomplished and your beneficiaries are properly planned for.
With the COVID-19 pandemic and the changes to the laws surrounding retirement accounts, now is a great time to review your estate plan. Please call us for an assessment and review of your planning documents to ensure you, your family and friends are correctly positioned to achieve your planning objectives in these challenging times. We are taking phone conferences through the stay at home order and look forward to hearing from you. Stay safe and healthy!