Recently the SECURE Act (Setting Every Community Up for Retirement Act of 2019) passed the House but the Act is currently stalled in the Senate. It is expected to pass once a few provisions are ironed out. One of the provisions in the bill does away with the ability to stretch your IRA after death over the lifetime of a designated beneficiary. The “stretch” IRA is eliminated and is replaced with a requirement to pay out the IRA over a 10 year period – with a few exceptions. RMD also gets bumped from age 70.5 to 72.
This severely hampers the benefits of IRA Trusts. The conduit trust is effectively eliminated and the discretionary trust becomes much less efficient.
There are still some options to help clients especially if they have a Roth IRA (no RMD requirements) or can convert to a Roth, want to set up a charitable trust or can qualify for life insurance.
Likely, more to come on this topic, especially if the SECURE Act is passed. Regardless, FSTC will be able to help navigate the options.
Please reach out to our Business Development Officers for details.
Jim Okamura, President FSTC
The posts expressed are views of FSTC and are not intended as advice or recommendations. For informational purposes only.