The Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019, which passed the House in a 417-3 vote and will now likely pass the Senate by unanimous consent, will probably change your estate planning.  Under the previous rules, we could ‘stretch’ IRA distributions to non-spouse beneficiaries, which allowed for a potentially significant income tax savings to the children of IRA owners. For example, under the old rules, if Millicent is the owner of a $1 million IRA and leaves it to her 25-year-old granddaughter Halsey, Halsey could have stretched the distributions over her life expectancy of 57.2 years.  Coupled with the fact that inherited IRAs are subject to the claims of the beneficiary’s creditors, many IRA owners created ‘IRA Conduit Trusts’ or other mechanisms to make sure beneficiaries could take only the Required Minimum Distributions and assets in the IRA would be protected.

SECURE changes that paradigm...

Read the full blog post by Leon LaBrecque on Forbes.com here: https://www.forbes.com/sites/leonlabrecque/2019/08/06/have-an-ira-or-401...

 

View Leon LaBrecque's Forbes contributor profile and other blog posts here: https://www.forbes.com/sites/leonlabrecque/

For Important Disclosure Information click here: https://www.sequoia-financial.com/disclaimer

Image is Getty from original post.