Whenever new laws come into practice, they can change your estate plans. A new retirement law will be affecting IRAs and estate plans in Florida, according to a Jan. 13 report.
The new act, the SECURE Act, was signed by the president in December and has made significant changes to employer-sponsored retirement plans and individual retirement plans. While most of the changes are for the better overall, there is one popular estate planning strategy that has been impacted.
What’s the bad news about the SECURE Act?
The SECURE Act does change many aspects of estate planning, but perhaps the worst issue is that it affects how IRAs are handled after a person’s death. For example, if you are not the surviving spouse of the person who died, you can inherit the IRA but have to liquidate the account within 10 years.
There is also the potential for higher federal income taxes based on a bump up in your bracket due to the IRA distributions. State income and other taxes could also be impacted and change your expected income throughout the following years.
What do you need to do when estate planning strategies need to change?
When estate planning strategies have to change as a result of changes in law, it’s smart to get in touch with your attorney. Anytime the law changes, it has the potential to impact you and your estate plan. Your attorney will be able to tell you if your estate plan needs to be updated or if it’s still doing what it is meant to do.