The Secure Act | How SECURE are you in your estate plan?

Buckingham attorneys Ron Wayne and Sarah Blank discuss the top three changes from the SECURE Act and how they may impact your estate planning.

In this brief video, attorneys Ron Wayne and Sarah Blank discuss the SECURE Act and the key provisions that may affect you. Click on the video to find out more about these changes may impact your estate plan.

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Ronald Wayne:

Recognizing that you’ve probably already heard about The SECURE Act, we’re here today to just talk a little bit about some of the more important provisions. Sarah, every once in a while there is kind of a landmark law that comes down that affects the state planners and financial planners. And in 2019, 2020 we’ve had The SECURE Act. So I know there are many provisions, but we want to focus today on maybe two or three of the most important ones. So in your opinion, what are the most important provisions of The SECURE Act as they might affect our clients today?

Sarah Blank:

Well, there are three really big ones. The most controversial change that comes from The SECURE Act would be the elimination of the stretch provisions of a defined contribution plan or an IRA. The stretch provisions are no longer available for non-spouse beneficiaries and a few others. It instead, has a 10 year provision. So the entire inherited account must be depleted within 10 years of the plan participant’s death.

Ronald Wayne:

So as I understand it, Sarah, the reason that this can be such a big deal is, is that people for decades have been loading up their IRAs, believing that their beneficiaries would be able to distribute it out over their life expectancy. Now it’s compressed into 10 years, and so the income tax consequence could be dramatically increased and people need to be aware of that change.

Sarah Blank:

Yes, they need to review their plans and possibly revise them in order to protect their beneficiaries from the possible negative implications of the income tax. So another big change that comes with The SECURE Act is the increase in age for required minimum distributions and when they need to start. Before The SECURE Act, individuals had to start taking their required minimum distributions at 70 and a half. And then now after The SECURE Act, individuals will have to start taking it at 72 years old. So it gives them a year and a half more before they have to start taking their required minimum distributions.

Ronald Wayne:

So Sarah, as I understand it, The SECURE Act didn’t impact anything with reference to qualified charitable distributions. So a charitably inclined individual can still use their IRA to fund charitable bequests, is that correct?

Sarah Blank:

Exactly. The qualified charitable distributions remains at 70 and a half, so you still have a year and a half to continue that before required minimum distributions are required. And the last big change that came from The SECURE Act was the fact that they repealed the maximum age in which an individual can contribute to their IRA plan. Before The SECURE Act, an individual was only allowed to contribute to their plan until they were 70 and a half. And now after The SECURE Act, you can keep contributing to your plan as long as you have an earned income.

Ronald Wayne:

That’s a really nice provision under the law. I like that. So there are some good parts of The SECURE Act. There are some not so good parts of The SECURE Act. The kind of a bottom line for our clients is, is that we need to review with them their estate plans periodically to make sure that they’re as efficient as they can possibly be.

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Ronald F. Wayne, Esq., is Partner and Trusts & Estates Practice Group Leader at Buckingham, Doolittle & Burroughs, LLC in Northeast Ohio. Ron focuses on estate planning, probate, and elder law. He assists clients with the efficient transfer of wealth from generation to generation, business succession plans, and probate and trust litigation matters. Ron can be contacted at [email protected] or 216.615.7349.

Sarah K. Blank, Esq., is an Associate in the Trusts & Estates Practice Group. She helps clients plan for the future through estate planning, charitable gifting, and estate administration. Sarah works with a wide range of individuals, families, closely-held business owners and charities. Sarah can be contacted at [email protected] or 330.258.6509.

About Buckingham, Doolittle & Burroughs:

Buckingham is a corporate and litigation law firm that counsels Middle Market executives and business leaders all over Ohio and beyond. With offices in Akron, Canton and Cleveland, Buckingham offers clients sophisticated and practical legal services. Serving the region for over 100 years, Buckingham’s mission is to deliver meaningful experiences through the practice of law, exceed expectations in terms of service, counsel and business sense, and to offer continuous value to the industries, communities and clients they serve. Visit bdblaw.com to learn more.