If you still have questions regarding the impact of the SECURE Act on your client’s individual retirement account (IRA) and estate plan, you are not alone. Planning for clients whose largest asset is their IRA was already challenging prior to the passage of the SECURE Act, but with new rules and exceptions to consider, planning for these clients is even more complex. Now more than ever, estate planning attorneys must understand the ins and outs of the SECURE Act and how it affects their clients’ plans.
2020 has been a year of change and adaptation. From learning how to practice law virtually due to COVID-19 to major planning changes under the SECURE Act and CARES Act, many attorneys are wondering how they are going to keep their heads above water and keep their practices viable.
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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.