${site.data.firmName}${SEMFirmNameAlt}
Throughout Southern California
310-324-9403
Toll-Free
866-402-1805
View Our Practice Areas

New Legislation Will Have A Big Impact On IRA Planning!

The U.S. House of Representatives has recently passed the "SECURE" Act and it's expected to soon be approved by the Senate and signed into law by the President.  This new law will enhance the ability of workers to set aside, on a tax-advantaged basis, more money to fund their retirement.  Good news!  However, also buried in the Bill is a little-known provision that will accelerate and increase the taxation of inherited IRAs - - in order to pay for these new worker benefits! Not so good news!

 "Stretchout" Will Be Severely Limited

Currently, when an IRA (or employer retirement plans which may be rolled into IRAs) are inherited by a non-spouse beneficiary, such as a child, that child can defer or "stretchout" the taxable required maximum distributions over that child's lifetime.  This is a huge benefit to the child and his or her family.  The ability to compound money tax-deferred inside an inherited IRA for a long period of time may result in a much larger retirement fund being available later in life.  Unfortunately, this stretchout rule will dramatically change under the SECURE Act. 

Instead of a non-spouse beneficiary being able to stretchout required minimum distributions over his or her lifetime, these will have to, in most cases, come out of the inherited IRA by the 10th  anniversary of the original IRA owner's death.  In other words, the new stretchout period will only be 10 years versus 30, 40 or more years!  Not only will significant tax-deferral (and tax-free compounding inside the IRA) be lost, but since a much larger amount will be forced to come out of the IRA quickly, those distributions probably will be income taxed at much higher rates!

 How Will We Adapt To This New Law?

Our firm, with the help of a nationally renowned IRA expert, is watching this law carefully and already formulating strategies to reduce the future negative tax impact on your IRAs when they are inherited.  Since the final details of this new law are still subject to possible change in the Senate before it becomes final, we are awaiting the final Act version prior to informing our clients as to your best IRA planning options (including what to do with your existing IRA Inheritance Trust®, should you have one). Stay tuned!

No Comments

Leave a comment
Comment Information
Email Us For A Response

Find Out The Difference That Experience And Expertise Makes

Get the peace of mind that you deserve. First, attend a seminar. This will entitle you to a free initial consultation and a discounted estate planning fee. To learn more about our services or sign up for a seminar, contact us online or call us at 866-402-1805. We have offices in Torrance, Orange, Newport Beach, Pasadena and Woodland Hills.

Questions? Contact Us.

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Call Now For A Free Consultation: 866-402-1805
  • ${site.data.firmName}${SEMFirmNameAlt}
  • Main Office: Torrance

    Torrance Office
    990 West 190th Street
    Suite 500
    Torrance, CA 90502

    Toll Free: 866-402-1805
    Map & Directions

    Orange Office
    333 City Boulevard West
    17th Floor
    Orange, CA 92660

    Toll Free: 866-402-1805
    Map & Directions

    Newport Beach Office
    5000 Birch Street
    Suite 8000
    Newport Beach, CA 92660

    Toll Free: 866-402-1805
    Map & Directions

    Pasadena Office
    790 East Colorado Boulevard
    9th Floor
    Pasadena, CA 91101

    Toll Free: 866-402-1805
    Map & Directions

    Woodland Hills Office
    5850 Canoga Avenue
    4th Floor
    Woodland Hills, CA 91367

    Toll Free: 866-402-1805
    Map & Directions

    Office map
Check out The Law Firm of Kavesh, Minor & Otis on Yelp
Check out Kavesh Minor & Otis on Yelp
Check out The Law Firm of Kavesh, Minor & Otis - Orange on Yelp
Check out The Law Firm of Kavesh Minor & Otis - Pasadena on Yelp