However, as a revenue raising measure, the SECURE Act also significantly curtails a common estate planning strategy referred to as a “stretch IRA.” The “stretch” was obtained when a non-spouse designated beneficiary (for example, a child or grandchild) or certain kinds of trusts inherited a qualified retirement account (including an IRA or 401(k)) and was able to withdraw the funds in annual installments based on the life expectancy of the beneficiary.
The SECURE Act is intended to make it easier for a broad range of individuals to save for retirement and includes several taxpayer friendly provisions. The Setting Every Community Up for Retirement Enhancement Act (the “SECURE Act”) was enacted on December 20, 2019, as part of a major appropriations bill. 2)Ĭlients should review their estate planning strategy and contact their Blank Rome attorney as soon as possible to determine if any revisions are necessary or advisable to account for the recently enacted SECURE Act, particularly if any beneficiary (primary or contingent) of their qualified retirement accounts is a trust.
Tax, Benefits, and Private Client January 2020 (No.
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