How the SECURE Act Changes Trust & Estate Planning

June 2020

Signed into law in December 2019, the “Setting Every Community Up for Retirement Enhancement” or SECURE Act changes estate planning and has important implications for individuals as well as employers. Three of the most significant changes that took effect on January 1, 2020 are listed below:
1. The required minimum distributions from 401(k) plans and traditional IRAs is moved from age 70 ½ to age 72. The age limit for individuals to contribute to a traditional IRA (previously 70 ½) has been removed.

2. Funds from a 401(k) account or other defined contribution plan that are inherited by a non-spouse beneficiary must now be distributed within 10 years following the death of the account holder. Often referred to as “stretch” IRAs, these funds could previously be distributed over the recipient’s lifetime.

3. IRS penalties for errors in filing an annual Form 5500 are increasing substantially.
Contact one of Hunter, Smith, & Davis LLP’s Estate Planning and Administration attorneys below to discuss how SECURE Act changes will affect you and your family.

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