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Under the new Setting Every Community Up for Retirement Enhancement Act of 2019, better known as the SECURE Act, designated beneficiaries must take a full payout from their Inherited IRA within ten years after the death of the IRA owner.
However, if a designated beneficiary is an “eligible designated beneficiary,” they are not subject to the new rules.
Included in the definition of “eligible designated beneficiary” are the surviving spouse, a child who has not reached the age of majority, a disabled beneficiary, a chronically ill individual, and an individual who is not more than 10 years younger than the IRA owner.
Note, however, that when the minor beneficiary reaches the age of majority, he or she shall cease to be an “eligible designated beneficiary” and their remaining portion must be distributed within 10 years after their reaching the age of majority.
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Paul Rabalais
Estate Planning Attorney
www.RabalaisEstatePlanning.com
Phone: (225) 329-2450…(read more)
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i request a copy of a trust etc How family are confident im going to lose contesting anything and attorneys also what the hell i applied for a loan my credit shows a mortgage? where im assuming the home zip ziltch zero im a junior making it even worse im not 86 and deceased bankruptcy? i cant get my own mortgage if ive been frauded. Sibling buys houses and cars no body renting the place and its in a military community screw the veteran brother vets and beneficiaries rights where? oh HAWAII? SOL BUDDY
What if the IRA owner/parent did not designate the disabled adult son as benef of IRA and the IRA goes to the family trust. Disabled son has a special needs SubTrust
Great video! I have been wanting to transfer an Inherited IRA (cash) from a brokerage account to a Vanguard mutual fund. I spent 2 hours on phone yesterday with Vanguard opening a new "inherited IRA" account. The transfer request was sent by Vanguard to my brokerage account yesterday and which was immediately rejected because the decedent's name was not on the transfer request and the title did not match name on brokerage account (which includes decedent's name). In the last 24 hours I have spoken with several "reps" from Vanguard who insisted the transfer request was correctly titled. We had a 3-way call this morning with my brokerage account and Vanguard rep who explained once again that the decedent's name MUST be included on the transfer request and the reason(s) why. Yes we both had to give Vanguard rep tutorial on correctly titling of inherited IRA accounts. After speaking with 5 reps at Vanguard, 2 of which indicated they were familiar with the SECURE and/or CARES act regarding annual RMD distributions, I decided to cancel transfer and shut down my Vanguard account. Vanguard NEVER requested the date of death of the decedent which would alert them that the SECURE and/or CARES act does NOT apply to these funds since the date of death of decedent was BEFORE 12/2019. I was uncomfortable having inherited IRA funds with Vanguard as they would calculate my annual RMD incorrectly and deplete the account within 5 years due to the SECURE act which is exactly what I don't want to happen. I wanted the funds to GROW! Vanguard really needs to train their reps the correct way to open Inherited fund accounts and set up the correct annual RMD calculation which includes the date of death of the decedent. Big waste of time!
What about charity for ira
Nothing secure about the SECURE Act, nothing patriotic about the PATRIOT Act and Citizens United is all about corporate influence and has little to do with hard working American citizens. US is a sewer of massive proportions!
"The rich get richer, the middle class pays all the taxes and the poor are there to scare the shit out of the middle class." – George Carlin paraphrase
Just heard of this from Wells Fargo today. It looks like even their "Retirement – Estate Planning " people don't know much about this. My mother left two accounts to my sister and myself when she passed away in February 2020. The back sent me paperwork for me to fill out based on the old system. I sent it in and today I get a note saying I needed to set it up based on the SECURE system. So why did they even send out the old paperwork. Crazy. And I don't see how it can be more secure. Looks to me to be less secure.
If the individual owning the IRA died before the SECURE act, do the old rules that the beneficiary elected still apply or does the beneficiary need to follow the new rules from now on?
I assume the tax payment is for a traditional IRA. If it's a Roth, then no tax, correct??
What do you think of this plan? Is my logic correct?
When I draft a revocable Trust for my young or single parent clients, I will now have them name the Trust as beneficiary on all accounts, except that I will have them name NO beneficiary for the IRA's. I want the IRS's to drop back into their estates where the Trustee named in the Will will control the IRA's (If I have the clients name the Trust as beneficiary, that may screw up the exception for minors, and if I have them name the minors directly, that forces their families to go through the judicial process of appointing a guardian of the children's property).
I haven't heard a word about this through the media, my employer, my retirement plan or the IRS. Seems like the government is trying to squeeze senior citizens and their heirs so the 1% can continue to live tax free. Sickening.
My Mom left me a Beneficiary Designation with Restricted Payout”. Where I get 4500 a year. Ive ran into health problems and needing to take a withdrawl they will not let me ecen applying for a hardship. They call it a control from the grave form she filled out. My Mom didnt plan on me having health problems is there really no way around that even with the new laws? Or with the new things changing due to the covid 19? Im at my wits end with rejection can you guide me anyway or give me some knowledge on it? I am the primary owner its a IRA retirement annuity they say i cant touch it for 15 years i wont be here that long what can I do? My finacial advisor just tells me to google it very frustrated
I think this act destroyed my special needs kid future
We need the tax attorneys to find some work around to the end of the stretch. They have rendered the conduit trust worthless.
Owner dies in 2020, leaves ira to son now under 10 year ruling, Son becomes disable after 5 years of withdrawals, Can he now stretch the inherited ira over his life time?
I'm sorry, but this guy doesn't give me the confidence that he is familiar enough with the "new" requirements to make recommendations on what to do. Maybe it's just his manner of speaking but he doesn't sound like he has figured out what the new rules are and what to do about them to try to avoid the consequences.
If you think you are going to die soon – say within 6 months to a year – there's nothing to keep you from withdrawing your IRA or CD funds without penalty – this is usually a provision for every IRA or CD – and gifting the money to the beneficiary tax free up to about 13 million dollars. The only requirement is that you have to fill out an IRS form and file it if the amount you are gifting is over 15K +/- (the amount increases every year to provide for inflation). There are no taxes due from either party. You don't have to let the IRA or CD run until you die and let the person inherit it and have a tax bill due every year for 10 years or a really big one at the end of 10 years.
Why this guy doesn't just say that instead of searching around for what to say next is beyond me. I wouldn't hire him as a consultant based on his videos.
Does this imply a shake up fo standard recruitment withdrawal strategies and investments ? ie withdraw from your traditional IRA BEFORE selling capital appreciates stocks that will transfer to your kids with step up ?! Also after a. Creation age, dont save beyond what your employer matches ?
Good video, but I read that if you have a inherited Ira prior to dec 29, 2019 , then you use the old rmd, instead of the 10 year rule?
Let say an adult child inherits an IRA from their parent. 10 year draw down, I get it. The child names a bene on the inherited IRA and dies before the 10 years is up. Does the new bene now get another 10 years to draw down the new inherited IRA? Thanks.