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Reviewing trusts and other estate planning tools under SECURE Act

Strategies and tools that previously worked to protect Florida estates from taxes may be a liability under the new rules of the SECURE Act. In addition to the raising of the estate tax exemption limit to $11.4 million, Congress has changed the rules governing IRA withdrawals. A professional in the field explained the change and how to minimize its effects with the tools of estate planning.

Withdrawals from the IRA of a deceased benefactor can trigger significant tax bills. Previously, spouses could roll over a partner's IRA into their own, but children and other benefactors had to follow a minimum required withdrawal over their expected lifetime. The SECURE Act changes this by forcing full withdrawal at the end of a 10-year span. One professional suggests that estate planning can solve the problem. An option given was dividing an IRA between a surviving spouse, who can roll it over with no tax burden, and another heir.

Another method of avoiding the tax burden is likely to become more popular with an aging population. Conversion of a contributory IRA to a Roth IRA allows the benefactor to choose when and how much of the tax burden to pre-pay, which could be especially useful during the lowered income years of retirement. Any trusts or heirs receiving the Roth IRA would no longer be forced into the 10-year requirement for withdrawal.

When tax rules change, benefactors in Miami must compensate by reviewing the tax consequences and utilizing what estate planning tools are available to minimize those consequences. Periodic review of the will and estate organization can also ensure that loved ones are protected and the benefactor's wishes are secure from legal challenges. An attorney with experience in the field of estate planning may explain the various types of trusts and other tools for meeting individual needs and help protect the final will from litigation.

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