Note: This page is dedicated to current clients and will be revised on a periodic basis with information relating to recommended updates to estate plans which have been drafted by my office.
It is the responsibility of all clients to monitor their unique estate planning objectives and any changes to their personal or financial affairs which may affect their estate plan.
Please contact my office if you have any questions about these recommended updates or your current estate plan documents.
RETIREMENT PLANNING UPDATE
Starting January 1, 2020
The new Federal SECURE Act
(Setting Every Community Up For Retirement Enhancement Act)
Under previous federal law (2019 and before) when a non-spouse individual (i.e. the beneficiary) inherited a Individual Retirement Account (IRA), 401(k) or other similar workplace retirement plan from a deceased original account holder such beneficiary was required by federal law to receive or "take out" annual minimum distributions from such inherited accounts (i.e. Required Minimum Distributions). The Required Minimum Distributions (RMDs) were based upon published Internal Revenue Service (IRS) Life Expectancy charts. As a result, many non-spouse beneficiaries could effectively delay or "stretch" out the full distribution of the assets of a inherited retirement account over many years based upon the age and life expectancy of such beneficiary.
The new federal SECURE Act of 2020 requires non-spouse beneficiaries of a inherited retirement account to withdraw all assets of such inherited account within 10 years of the original account holder's death. There are no required annual distributions as long as all assets of such inherited retirement account are distributed within 10 years of the original account holder's death. There are execptions to this new law as relates to minor children, disabled beneficiaries and beneficiaries less than ten years younger than the original account owner. This new SECURE Act will be a major disadvantage for younger non-spouse beneficiaries as they will be required to take out more money from inherited retirement accounts over a shorter period in time, most likely resulting in a higher federal income tax burden (and if applicable, state income tax burden) at some point during the required 10 year distribution period. Distributions from ROTH IRAs are tax free.
Five Year Review: It is strongly recommended you review your estate plan documents and named beneficiaries for all assets at least every five (5) years. In the event you have experienced changes in your personal objectives and/or financial affairs please contact my office for a review of your current estate plan.
Trust Update 2021: The federal tax laws have changed numerous times over the past several years, especially the estate tax and gift tax provisions. In addition, the Trust Laws in Missouri were recently revised. As such, it is recommended all clients who have a trust as part of their estate plan contact my office for a full review and to discuss any changes in distribution objectives.
Married Couples: Conversion of Separate Revocable Living Trust Plan to Joint Revocable Living Trust Plan: Married couples who planned their estate prior to 2010 utilizing Revocable Living Trusts had separate trusts created to take advantage of the then current estate tax exemption laws. Currently, the estate tax exemption is $11,700,000 per individual and as a result many such married clients may not need separate trusts (from a tax planning standpoint) if their total gross estate is less than the current estate tax exemption. There may be other non-tax planning reasons for continuing with a separate trust plan, but all married clients with a separate trust plan may wish to have their unique estate planning objectives reviewed and learn if a Joint Revocable Trust Plan may be more advantageous.
HIPAA Update: The Federal Health Insurance Portability and Accountability Act (HIPAA) sets forth strict rules and provisions relating to the disclosure of health insurance information and the ability of individuals to review the medical files of their loved ones. There may be a need to update your Durable Power of Attorney for Health Care Decisions to incorporate new provisions which address such matter in detail.