The Setting Every Community Up for Retirement Enhancement Act (“SECURE Act”) was signed into law on December 20, 2019.
WHAT IT MEANS:
The new law means that IRAs inherited by non-spouses must be paid out within 10 years of the planholder’s date of death.
THE BIG PICTURE:
“Stretch” IRAs, structured in a way that distributed their contents over the expected lifetime of the beneficiary, can no longer be used.
- This was a useful strategy for the extended deferral of taxes, as IRAs come with a tax burden for the beneficiary.
Review your estate plan and ensure that your beneficiary designations are up to date.
- Consider whether or not your designated beneficiaries would be able to handle the tax impact of a quicker distribution timeline.