So, what does all this mean to you?
- Fortunately, for the purposes of the new 10-year payout requirement, the rules for determining how beneficiaries are designated do not come into play until the death of the original account holder. This reprieve provides you an opportunity to reevaluate existing trust documents and ensure the tax language is consistent with the new rules and your estate planning objectives.
- If you have a trust--other than a Supplemental Needs Trust--which is named as the beneficiary of a retirement account, then you likely should amend that trust to insert the Accumulation Trust provisions.
- If only individuals are named as beneficiaries of your retirement accounts, then there is probably no need to update your estate plan.
- If your estate plan contains a Supplemental Needs Trust for a family member with a disability, it is likely that the SECURE Act will permit the life expectancy of the Supplemental Needs Trust beneficiary to govern the required minimum distributions rather than the compressed 10-year payout rule. As described above, Supplemental Needs Trusts that are older or have multiple beneficiaries should be amended.
- If it appears that your estate plan is affected by the SECURE Act, or you are not sure, you should schedule an appointment with your estate planning attorney. Just call Alex Matulewicz at 508-660-0331.
