Estate Planning for Retirement Accounts Post-SECURE Acts Tips and Traps for a Treacherous Intersection (On-Demand)

Course Description

This course looks at the significant challenges for estate planning attorneys and financial and tax professionals in planning for a client’s retirement accounts after their death. Many legacy goals can be undermined by a lack of planning or inadequate planning, resulting in unintended consequences and/or excessive taxation. Although always complex, since the passage of the two SECURE Act laws and regulations, the intersection of retirement accounts and estate planning has become an area that requires careful analysis and planning for each client’s personal situation, and an assessment of the tradeoffs between estate planning goals and financial and tax considerations.

Principles

• Introduction to Retirement Accounts
• Inherited Retirement Account Fundamentals
• Retirement Accounts in ongoing Trusts
• “Just Say No?” – Planning Options other Than Trusts for Retirement Account Assets

Syllabus

1. Introduction to Retirement Accounts
   • Current retirement account situation in the U.S.
   • IRAs, employer accounts, traditional and Roth
   • Obligations and opportunities for account owners
   • Sloppy terminology can cause tax catastrophes
     • Rollovers vs. Direct Transfers vs. “Indirect Transfers”
   • Preparing for retirement account “leftovers” at death
     • The critical importance of beneficiary designation forms for retirement accounts—and no, it is not often easy!
     • Spouse as beneficiary? Outright to beneficiaries? Ongoing Trusts? Charitable vs. Individual beneficiaries?
2. Inherited Retirement Account Fundamentals
   • Haste can make waste! Analysis of options before taking action
   • Identifying the beneficiaries and the options for each class of beneficiary
     • EDBs, DBs, and “plain old” Beneficiaries, oh my!
   • Is there an opportunity to simplify the beneficiary distribution process?
     • “Paying off” charities early can be a good strategy
     • Distinguishing between different classes of beneficiaries can initially add complexity to the process, but can ultimately provide the best, and simplest, outcome
   • If outright distribution is not the plan, how do you make an ongoing Trust work?
3. Retirement Accounts in Ongoing Trusts
   • The basics of a “see-through” Trust
     • Accumulation vs. Conduit Trusts
     • Pros and cons of each type of qualifying Trust
     • Okay, your Trust qualifies—now what?
   • Planning situations for retirement accounts in Trusts
     • Changes in multi-beneficiary Trust planning
     • Disabled/chronically ill beneficiary
     • Marital QTIP Trusts
     • Minor beneficiaries with/without age milestones in Trust
     • Spendthrift Trust for beneficiaries needing “adult supervision”
     • Other situations where a Trust may be appropriate
4. “Just Say No?” – Planning Options other Than Trusts for Retirement Account Assets
   • Do you really need an ongoing Trust?
   • Use other non-IRA assets to fund ongoing Trusts
     • Cash is king for ongoing Trusts
     • Non-IRA investment accounts offer capital gains tax benefit (cost basis step-up) as well as more flexibility for your Trustee in making distributions
     • Spend down IRAs or make QCDs and have charities as IRA beneficiaries
     • Roth IRAs offer more flexibility but still have challenges
     • Use of life insurance benefits or Irrevocable Life Insurance Trust (ILIT) can be a game changer
   • Consider the possibility of using a restricted Single Premium Immediate Annuity (R-SPIA) for a guaranteed stream of income to a beneficiary without their having the ability to cash it out