The SECURE ACT destroys my Estate Planning Strategy

Submitted by Richard Rea on Thu, 2019-12-26 03:25

The keystone of my Estate Plan was the “Stretched IRA”. I am 72 and started RMDs a few years ago. 2019 Example: self managed TIRA grew $225,000 RMD $55,000 so TIRA grew $175,000 to $1.5M. (Thank the Federal Reserve Policies of ZIRP and QE). Current benefiticeries 3 adult children. 8 Grand children ages 1 to 9 not currently included. Other committing suicide by Dec 31st , 2019 LOL What are my options for a revised Estate Planfor my IRA assets. TIA



Submitted by Norman Cook on Thu, 2019-12-26 19:10

2X

Submitted by Bruce Steiner on Fri, 2019-12-27 04:33

  • You could do some Roth conversions.
  • You could leave the portion not converted to a Roth to charitable remainder trusts for your children.  Each child would receive a percentage (not less than 5%) of the value of the trust each year for life.  The percentage could be of the value of the trust at the inception, or of the value each year.  Upon the child’s death, the balance of the trust would go to charity.  The value of the charity’s interest has to be at least 10% of the value of the trust at the inception.
  • That would replicate the stretch.  The benefit of replicating the trust will likely slightly outweigh the loss of the remainder at the children’s deaths.  Note, however, that a charitable remainder trust gives up some flexibiilty.
  • IRA owners who elected recalculation and didn’t have a spouse beneficiary often did this before the proposed regulations were overhauled in 2001.
  • Bruce Steiner

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