One year ago this week, the House passed the SECURE Act with 417 yeas and 3 nays. Although this bill, Setting Every Community Up for Retirement Enhancement Act of 2019, H.R. 1994, 116th Cong. (2019), had overwhelming bipartisan support, it languished in the Senate. Estate planning attorneys, financial planners, and industry experts watched the bill for the rest of 2019 with particular interest, in large part because of a provision in Title IV of the bill that proposed modifying the required minimum distribution rules for qualified retirement accounts by eliminating the “stretch” for all beneficiaries except those qualifying as “eligible designated beneficiaries.” By December 2019, it seemed that the SECURE Act bill was going to die with the year. However, in a last-minute move, the SECURE Act was attached to the Further Consolidated Appropriations Act (FCAA) of 2020, H.R. 1865, 116th Cong. (2020), in a slightly modified form. This version of the SECURE Act, which Congress passed in mid-December, was signed into law on December 20, 2019, with an effective date of January 1, 2020, for most of its provisions. 

From case law approving an alternative pleading model for trust beneficiaries to avoid triggering a no-contest clause, to COVID-19 relief measures, we have  seen significant developments in estate planning and business law recently. To ensure that you stay abreast of these legal changes, we have highlighted a few noteworthy developments and analyzed how they may impact your estate planning and business law practice.

Legal developments we will cover:

• IRS Regulations Clarify Treatment of Excess Deductions Passed on to Beneficiaries
• New Interim Final Rule Authorizes PPP Loan Increases for Partnerships
• Virginia Supreme Court’s Ruling on No-Contest Clause Case
• Valuation Discount Disallowed for Lack of Control
• IRS Issues FAQs Regarding COVID-19 Relief for Estate and Gift
• Expenses Paid Using PPP Loan Proceeds Later Forgiven Not Deductible
• Congress Passes PPP and Health Care Enhancement Act
• Temporary Relief for Small Businesses Seeking Funding Through Crowdfunding

Recently, many have begun planning for the possibility that they may fall ill and may not be able to conduct business as usual. The most commonly thought of planning device for such situations is the power of attorney (POA). A POA is a document whereby a “principal,” the person signing the document, gives certain powers to an “agent,” the person designated to act on behalf of the principal. A POA allows an individual to name another person to act on their behalf during times of incapacity, for a particular purpose, for a specified duration of time, or even to simply execute everyday dealings for the individual. It all depends upon the type of POA established and the objectives sought.

Selecting the right POA document for the situation is critical for effective execution of the principal’s wishes. Some POAs give agents the power to make healthcare decisions during the principal’s incapacity. Others allow the agent to sign legal documents or financial paperwork for an unavailable principal. Some last until incapacity, others last until the principal’s death. The general actions an agent is permitted to take depends solely on what the POA has dictated. There have been many occasions where the bounds of the four corners of a POA were tested.