January 23, 2020
While the SECURE Act reforms are supposed to make saving for retirement more accessible for a greater number of Americans, there could be unintended consequences, especially for beneficiaries of inherited retirement assets.
However, certain beneficiaries–called eligible designated beneficiaries (EDBs)–are exempt from the 10-year rule. EDBs include the surviving spouse or minor children (until they reach majority) of the account owner, disabled or chronically ill individuals, and beneficiaries who are less than 10 years younger than the deceased owner.
It is important to note that the rules for non-designated beneficiaries (i.e., estates, charitable organizations and non-qualified trusts) remain the same as they were before the SECURE Act.
In light of the new rules under the SECURE Act, you may find that you need to reevaluate your retirement accounts and any related estate planning strategies.
Because the SECURE Act entails so many broad and sweeping changes to the retirement and estate planning landscape, it is important to be proactive. We recommend that you work with your team of advisors–including your CIBC Private Wealth Management team and your tax and legal advisors–to help you determine the potential impact of the new legislation on your retirement accounts and your beneficiaries.
Theresa Marx is a senior wealth strategist for CIBC Private Wealth Management in Chicago, with 15 years of industry experience. In this role, she is responsible for developing integrated wealth management solutions and providing comprehensive estate and financial planning services to high net worth clients.
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