Law Offices of Frye & Vazquez, P.L. - estate planning
Se Habla Español
Coronavirus Update: We are equipped to address your estate, asset protection, and healthcare designation planning with proper precautions in our office or remotely through telephone and video conferencing. Social distancing does not have to stop you from attending to your planning needs. Learn more about our services during COVID-19 here or call us at 305-424-2529 for further details.

Contact Us


Proposed new law will alter estate planning in Florida

Under existing laws, the owner of an IRA can make a child the beneficiary of the account instead of a spouse. Because the younger beneficiary will have a longer life expectancy than the spouse, the required minimum distribution will be less and the IRA can continue to grow. This has been referred to as the ‘Stretch IRA” concept. The Setting Every Community Up for Retirement Enhancement Act of 2019 is poised to change that.

SECURE has overwhelmingly passed the House and appears to have no opposition in the Senate. Currently, a non-spouse beneficiary can withdraw the funds in the IRA account in one lump sum, take only the RMD under the stretch option or cash in the account over a five-year period. The new law, according to retirement and pension analysts, will eliminate the stretch option but allow for the distribution to occur over a 10-year period. In addition, the elimination of the stretch option also applies to all qualified plans with balances, such as a 401(k) and the like.

There are exceptions. A spouse will continue to be permitted to roll the decedent’s IRA into their own and withdraw over their lifetime. Additionally, there are provisions for children under the age of majority, beneficiaries with disabilities and beneficiaries within 10 years of the decedent’s age.

The stretch IRA has been a valuable tax-saving tool for high-asset estates to pass on wealth to future generations. In anticipation of the SECURE act’s passing and being enacted into law, an estate planning lawyer can provide counsel and review different options for moving forward under the new restrictions.



FindLaw Network