It’s the last Monday of the month, and that means it’s time for the January roundup of elder law news items. First of all, the SECURE Act was passed in late December, so the first few weeks of the year brought lots of discussion about it. We’ve rounded up some of the most interesting articles, blog posts, and musings. If, however, you are not interested in SECURE, scroll down for items on state estate taxes, pet protection, and a new trend in coping with grief.
SECURE Act Causes Some Insecurity
Very quickly after the SECURE Act passed in December, elder law attorneys, including our own Robert B. Fleming, quickly gave us the highlights.
Of course there’s plenty out there giving similar overviews. Here are just a few: National Law Review, global law firm K&L Gates, Kiplinger, financial planning nerd Michael Kitces’s blog (with a nifty summary chart), Investment News magazine (coverage starts on page 5).
But for a deeper dive, check out the 35-page analysis from Natalie Choate, the universally recognized guru of estate planning and retirement plans.
As the days passed, more reading ensued. Nuances of the Act, some good and some not so good, were dissected and discussed. Because this is still new, expect this to continue in the months (and probably years) ahead. Among the interesting reads on specific Act-related topics:
- How law affects special needs trusts, including fixing the “kiddie tax” treatment for minor beneficiaries.
- One possibly unintended consequence: the Act limits the amount of Qualified Charitable Distributions (“QCDs”) the holder of a traditional IRA can make.
- Tucson attorney Brent Nelson explained that, if you really dissect the options, naming a trust as an IRA beneficiary became even more complicated.
In addition, to deal with the much-discussed loss of the “stretch” for inherited IRAs, different strategies are emerging:
- Consider the likely tax situation of the potential beneficiaries and adjust designated beneficiaries accordingly.
- If you have charitable intent, consider a charitable remainder trust.
- Think about converting to a Roth: Is it right for you?; how a conversion works with an IRA trust; and some traps to avoid.
There of course is a lot more out there. If you are interested in ongoing analysis, there’s The Slott Report, with almost daily posts on IRA news. Don’t believe everything you read, though. Especially right after a new law arrives, be mindful that 1) it takes a while for the dust to settle, 2) regulations, certain to come along, should clarify some things, and 3) every person’s situation is different. Plan to talk with your financial advisor and estate planning attorney.
As for other interesting tidbits for the January roundup:
Are State Estate Taxes Coming Back?
Virginia eliminated its state estate tax in 2007. Now there are bills in both branches of the Virginia legislature proposing to revive the tax. Both bills propose taxes at 1970s levels. What’s more, the tax has a good chance of passing in some form. Democrats now control the legislature and the governorship. Could this be the beginning of a trend?
Beyond the Common Pet Trust
Many people who adore their critters have a plan for their care after the owner’s death in their Will or Trust. Do these plans extend to periods of incapacity? Not usually. This article proposes creating a stand-alone living trust solely for animals so you can provide both funds and detailed direction regarding their care.
Cook Together for Healing
It’s a common practice to take a covered dish over for people who are grieving. Some are taking this practice a step further and holding cooking parties. The gatherings, where loved ones make an entire meal together, can provide a great deal of comfort. Says one participant: “There’s something really nourishing about bringing a community together to make food. It feels good not only to do this to help friends in need, but to connect in a practical way with other people who love them.”
That’s the January roundup. If you see an item of interest, please let us know.