Holiday Greetings!

Question.    What is the name of a document, that may help prevent unpleasant probate court proceedings after your death?  (Hint.   It is not a revocable living trust.)

We’ve written before about how the SECURE ACT, effective 1/1/2020, changes long standing rules that govern how quickly retirement plan monies must be taken out of the plans after the death of the plan owner, but it is worth another mention, as we look back on important changes to the estate planning landscape over the last year.     With some exceptions for surviving spouses and a few others known as Eligible Designated Beneficiaries, all plan funds must come out of the plans within ten years of the owner’s death, and but for Roth IRAs generally the funds will be ordinary income when received by the beneficiary, and taxed as such.   This can be particularly important if your current plan causes the funds to be payable to a trust for a young or possibly imprudent beneficiary, as in some cases the language of the trust you have may require that all funds must be immediately paid out to the beneficiary when received, resulting in the beneficiary perhaps receiving much larger sums annually than you envisioned when the plan was put in place.    For some clients and their families this may be acceptable, but for others it may not be.   We urge all persons who have retirement plan assets to review how the SECURE ACT may impact their plan, and this is especially important if your retirement plan assets will flow into any trust.

Question.   What is the biggest design failure of homes with an upper story?

(Answer……..bathrooms on the upper story……with plumbing that you know is breaking down when the ceiling of the first floor drips water on your head as you sit at the dinner table.)

Please stay safe.   Let us know if you need help with anything.   And remember the articles posted are not intended as legal advice, but rather as articles of general interest.  Please consult with an experienced attorney before adopting or revising your estate plan.