THINKING AHEAD TO THE NEXT GENERATION AND BEYOND… WHAT WILL BE YOUR LEGACY?

October 01, 2020

One of the items under the SECURE Act state that non-spouse beneficiaries who inherit an IRA or qualified plan must distribute the entire IRA within 10 years of the account owner’s death. The only exceptions besides spouses are beneficiaries who are disabled or chronically ill, a minor child of the account owner (until age of majority is reached), or a beneficiary who is not more than 10 years younger than the deceased account owner.  This item itself, creates even more urgency for multi-generational planning.

Here a few things to consider: have you had your estate planning documents updated? Who will be the executor of your estate? If you have more than $500,000 in your IRA, should we consider an IRA stretch trust for non-spouse beneficiaries?  Are your trusts properly funded? Are you interested in leaving a portion of your estate to a charity? How many generations out are you concerned about leaving a legacy to?

These are important questions to ponder in addition to any tax consequences that you may want to potentially alleviate within your estate. I am currently working with many families on a multi-generational level, and I need to make sure that I am working with all of my clients on these issues.  We need to have the conversation about who will be part of your legacy, and how do we make sure that it is in place. The time to do this is NOW. Let’s have that conversation sooner rather than later.