Implications of the SECURE Act and the CARES Act on Retirement and Estate Planning

By Alaina Davalos, Esq.

With so much turmoil and uncertainty taking place in our lives during the first half of 2020, and with the understanding that what was certain six months ago is no longer, Hoffman & Associates is strongly encouraging its clients to take time now and meet with our attorneys to discuss the impact of both the SECURE Act (signed into law on December 20, 2019) and the CARES Act (signed into law on March 27, 2020) on their retirement and estate plans. 

It may be especially important if you:

• Reach 70½ during 2020 and are concerned about required minimum distributions (RMDs).
  • Waiver of 2020 RMDs

• Would like to fund a traditional IRA but were previously advised that you were too old to do so.
  • No Age Cutoff for Traditional IRA Contributions

• Would like to withdraw funds from your retirement plan or IRA but are concerned about early withdrawal penalties.
  • Waiver of Early Withdrawal Penalties for 2020

• Have designated a child, grandchild, or much younger individual as the beneficiary of a retirement account to take advantage of the former rules to stretch out RMDs over that younger beneficiary’s life expectancy.
  • Elimination of “Stretch” RMDs

• Designated a trust as the beneficiary of a retirement benefit.
• Made decisions about the timing of distributions to beneficiaries in your estate plan in heavy reliance on the assumption that your beneficiary would elect to take RMDs from their retirement account over the beneficiary’s lifetime.
• Are charitably inclined (it may be possible to satisfy your charitable goals and provide stretch out distributions of your retirement account to your individual beneficiaries by establishing a charitable remainder trust).
  • 2020 Charitable Giving
• Are in a lower income tax bracket than your beneficiaries and want to reduce their tax burden by converting some or all of your retirement account to a Roth IRA and pay income taxes upon the conversion.
  • Conversion to Roth IRA with no RMD

For more information regarding this or any other estate planning or tax matter, please contact us at 404-255-7400 or info@hoffmanestatelaw.com.