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The purpose of this letter is to address the SECURE Act, which was just passed and signed into law by President Trump on December 20, 2019. The combination of impeachment proceedings and the Christmas holidays kept this out of the limelight of the press. But it passed alongside the spending bill.

For your reading pleasure, I’ve enclosed a summary article on the SECURE Act, written by the folks at Nationwide. But as it pertains to you, directly, I will address “the good, the bad, and the ugly,” regarding the SECURE Act.

The Good:
The IRS mandates required minimum distributions (RMD) from investors who hold qualified assets, such as an IRA or 401k. The SECURE Act has increased the age for RMD to age 72. Additionally, seniors with earned income may be able to make tax-deductible contributions to IRA accounts. That was previously not permitted after age 70 ½.

The Bad and the Ugly
Effective January 1, 2020, if an heir or beneficiary inherits qualified assets (such as IRA or 401k) from a non-spouse, the new SECURE Act requires a full taxable distribution over a period not greater than 10 years (exceptions include minors, for example). Note: if you hold an Inherited (Beneficiary) IRA prior to January 1, 2020, you are grandfathered under the old rules.

This change creates challenges in regard to estate planning. But rest assured, I’ve already composed and submitted potential strategies to attorneys through LPL, so that they can review it in light of the new law. Additionally, I’m attending a conference call on January 8th with other legal scholars as well. Regardless if you are an account holder of qualified assets or a potential beneficiary of qualified assets, we will continue to strategize for potential solutions.

As always, thank you for your continued business. Stay tuned for more on this important topic.

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