The SECURE Act has a lot of benefits, but now for the bad news. Under the SECURE Act, younger beneficiaries can no longer “stretch” the IRA they inherit. This was a process by which a beneficiary would take small required minimum distributions over his or her lifetime, while “stretching” the tax-deferred growth of the IRA over decades. IRA funds passed to beneficiaries, other than a spouse, will now have to be withdrawn within 10 years of the death of the original holder and will be subject to taxes much sooner than heirs may have been expecting.
This short video, explains in more detail losing the “stretch” ability is a big problem for your beneficiaries and covers these topics:
- What the “Ten-Year Rule” means and how its factored;
- What the tax impact will be for your beneficiaries; and
- Disappearing “safe-havens,” and why inherited retirement accounts will be exposed to creditors, predators, and the liabilities life.
Our hope is that this video is valuable to help you better understand some of the impacts to your estate and consequences to your family that the SECURE Act causes. However, it should not be a substitute for you seeking further legal, financial, or tax advice. Please reach out to your trusted advisors or feel free to ask us. We are always happy to help.