SECURE Act 2.0 Considerations for Estate Planners and Administrators

The SECURE Act 2.0 significantly expands the effect and provides additions to the 2019 SECURE Act. Estate planners, advisers, and attorneys must recognize the impact of the SECURE Act 2.0, the opportunities it provides for estate and tax planning, its requirements, and potential challenges.

Under the SECURE Act 2.0, certain workers, retired taxpayers, and small businesses stand to benefit from this recent legislation. The 2019 legislation increased the age for required minimum distributions from 70 ½ to 72, but now the RMD age has been increased to 73 for taxpayers not 72 years old on the last day of 2022.

Other welcomed additions that must be considered by estate planners include (1) a credit for 100 percent of the costs of establishing a retirement plan for eligible businesses with 50 employees or less; (2) eligibility to participate in 401(k) plans and payments on student loans for long-term part-time employees with employer matching contributions; (3) 529 plan rollovers to Roth IRAs; (4) changes to the RMD and reduction in the RMD excise tax; and other key items.

Many changes under SECURE Act 2.0 have specific effective dates along with IRS and DOL guidance in order to minimize substantial complications that may arise if such guidance isn't provided. Estate planners, advisers, and attorneys must understand the sweeping changes made by this legislation, who it affects, and how to handle the areas that are unclear as to estate and tax planning.

Listen as Salvatore J. LaMendola, Member at Giarmarco Mullins & Horton, discusses the key provisions of the SECURE Act 2.0 and how it impacts the planning and administration of estates and trusts and offers best practices for attorneys and advisers.