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Many families have the bulk of their wealth to IRAs and 401ks. Some or a great deal of this money you may have planned to give as inheritance to your heirs or family members. Have you taken into consideration the Secure Act and 10 year IRA rule when setting up these accounts?
When you leave money to heirs in a tax deferred account, the assets are now required to be completely taken out in 10 years. Do you and your heirs have a plan of how to withdraw this wealth and a strategy in place to keep as much in in their pockets and less with Uncle Sam? 
Coordinating the timing and having a strategy is very important. Chris Heerlein of REAP Financial out of Austin, Texas is here discussing strategies on how to prepare your wealth for your heirs.
To learn more about inheritance strategies given the Secure Act and 10 Year IRA Rule, contact our Austin financial planners at 

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The Secure Act, which was passed in 2019, has brought significant changes to the way people leave inheritance to their heirs. One of the most notable changes is the 10-year IRA rule.

The 10-year IRA rule states that when an individual dies and leaves behind an IRA to their heirs, the heirs must withdraw all the funds from the IRA within 10 years of the original owner’s death. This is a significant change from previous rules, which allowed heirs to stretch their withdrawals over their lifetime.

The main reason for this change is to generate revenue for the government. With the 10-year rule, the government will receive tax revenue on the entire amount within 10 years, rather than over the lifetime of the heir.

While this may seem like a disadvantage for the heirs, there are ways to minimize the tax impact. One way is to withdraw smaller amounts each year, rather than waiting until the end of the 10-year period to withdraw the entire amount. This can help keep the withdrawals in a lower tax bracket and reduce the overall tax burden.

It’s also worth noting that the 10-year rule only applies to IRA beneficiaries who are not considered eligible designated beneficiaries. Eligible designated beneficiaries include spouses, minor children, disabled individuals, and individuals not more than 10 years younger than the original owner. These beneficiaries are still able to stretch their withdrawals over their lifetime.

Another change brought about by the Secure Act is the age at which individuals must start taking required minimum distributions (RMDs) from their retirement accounts. Previously, the age was 70 and a half, but it has now been raised to 72. This change allows individuals to continue to contribute to their retirement accounts for a longer period of time and delay the start of their RMDs.

Overall, the Secure Act and the 10-year IRA rule mean that it’s important to review and update any estate planning documents, such as wills and trusts, to ensure they align with the new rules. Additionally, it’s important to discuss any potential tax implications with a financial advisor or estate planning attorney to help minimize the tax burden on heirs.

In summary, the Secure Act and the 10-year IRA rule bring significant changes to the way people leave inheritance to their heirs. While there may be some tax implications, there are ways to minimize the impact, and it’s important to review and update estate planning documents to ensure they align with the new rules.