The SECURE Act changed a variety of rules that can impact your retirement and estate planning. This week’s digest brings you up to speed on the aspects of the new SECURE Act that could affect you and proposes considering a beneficiary-directed trust for your heirs.
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The Top SECURE Act Provisions Individual Investors Should Be Aware Of |
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The SECURE Act, whose name stands for Setting Every Community Up for Retirement Enhancement, is the largest overhaul to retirement laws since 2006. These changes to retirement plan rules may impact your retirement and estate planning. Jamie Hopkins, director of retirement research at Carson Wealth, looks at the major changes likely to affect many of you, what impact they might have and possible planning strategies to maximize the changes.
Some of the changes covered in this article include:
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Modification of the required minimum distribution (RMD) rules for inherited retirement accounts
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Pushback of required beginning date for RMDs
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529 plan qualified distributions for payment of student loans
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Annuity and workplace retirement plan provisions
The SECURE Act won’t have an equal impact across everyone. Some people might benefit more than others. However, it’s important to look at the bill from an investor standpoint and make sure you know how it will impact your retirement and estate planning.
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Using Beneficiary-Directed Trusts to Protect Your Heirs |
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As a member of AAII you have invested wisely, perhaps with the hope that you can provide some financial security for your loved ones when you’re gone. Why not go the extra step to ensure that the inheritance you leave is there for its intended purpose? As attorneys who specialize in estate planning, John Horn and Dera Johnsen-Tracy suggest considering a beneficiary-directed trust, which would continue for the lifetime of the beneficiary and protect them from losing inherited trust assets to creditors and claimants even after they take over control of the trust. In this article, Horn and Johnsen-Tracy offer insights on how a beneficiary-directed trust works.
Some of the attributes covered include:
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The importance of irrevocability by the beneficiary
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Why an ascertainable distribution standard is recommended
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The benefits of implementing a spendthrift provision
Even after self-education about the beneficiary-directed trust, there is no simple way to carry out this strategy. Ultimately, you need a very experienced estate-planning attorney to create a proper beneficiary-directed trust. However, this article can help you decide if a beneficiary-directed trust is something you should consider.
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Member Question
The CARES Act suspends required minimum distributions (RMDs) for 2020. If you are retired, will this impact your withdrawal strategy?
A) Yes
B) No
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Be sure to vote on this week’s question for the opportunity to offer your insights on our open-ended question. |
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CARES Act Explained in Weekly Investor Update Email |
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 Charles Rotblut, editor of the AAII Journal, pens a free weekly email to address current issues on the minds of individual investors. On Thursday, April 9, his Investor Update explained in plain language the tax rule changes made by the CARES Act, which many members have asked about. If you missed his email, you can access it online in the Investor Update section. A full archive of past weekly columns is available at the bottom of the page. You can also join in the discussion by posting a comment or question. Log in to AAII.com and sign up to receive this valuable member benefit at www.aaii.com/email. More » |
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