As we near the end of 2020, with hopes of a better 2021, estate planning lawyers are encouraging their clients to reflect on legal changes that may have been overlooked in the past year.

Last January, the Setting Every Community Up for Retirement Enhancement (SECURE) Act was rolling out. There was a lot of discussion about how these changes would affect estate and retirement planning. Unfortunately, much of the urgency to deal with the SECURE Act was obscured by the COVID-19 crisis. However, estate planning lawyers are urging their clients not to leave this issue on the back burner too long.

What to Look Out For

The part of the law that is most likely to affect your estate plan is the mandatory distribution of IRA and 401(k) plans to non-spousal beneficiaries. For non-spousal beneficiaries, the entire account must now be distributed over a 10-year period. Previously, the distribution period was determined by the life expectancy of the beneficiary. This could have big tax consequences for your beneficiaries.

If you have substantial retirement savings in an IRA or 401(k), you may need to make some changes to your estate plan. This is especially important if this money is going to be passed on to a beneficiary who is not your spouse. A Standalone Retirement Trust, Irrevocable Life Insurance Trust, or a Charitable Remainder Trust may be options to explore as solutions.

It’s possible that the new SECURE Act may affect your estate plan. Consequently, you’ll want to have your documents reviewed by an experienced estate planning attorney. This is relevant especially if your documents are three years old or older. State and federal laws change often, and keeping your estate plan current, ensures it will work the way you want it to.

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Please contact us if you need help. Our estate planning lawyers will determine which options may be available to achieve your estate planning goals. Call us for a free consultation.