SECURE Act and family inheritance question

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
RadAudit
Posts: 4384
Joined: Mon May 26, 2008 10:20 am
Location: Second star on the right and straight on 'til morning

SECURE Act and family inheritance question

Post by RadAudit »

I've just returned from the estate lawyer and the chat included changing the trust to update it IAW some of the provisions of the SECURES Act. A few concerns came up.

My plan was / is after DW and I die to split the (small) estate (two mutual funds in tax deferred, a house and a little cash) into two trusts 50/50 and leave it to the kids. I'm 74. DW is 70. Kids are 40 and 35. There are two grandkids, so far. According to the SECURES Act, AFAIK, the proceeds from the fund have to be distributed within ten years after death. We chose via bloodlines for various reasons.

The lawyer suggested having the funds sit tax deferred after our death in the mutual funds for 10 years, then sell them, pay the taxes and roll on with the remaining money in the various new trusts. (Lawyer doesn't like paying taxes. Thinks this results in more money for the kids.)

My concern is what to do. Option 1 is go with my current plan. Option 2 is to go with some modification of what the lawyer suggests. I'm leaning toward what I've currently planned. Primarily because I don't know what will happen for the rest of the day much less 10 to 20 years from now. I don't like trying to control money from the grave. The kids expect 50/50 and should be bright enough to decide among options available to them at that time. If not, I failed anyway.

What say you about distributing estate to increase wealth to the kids?
Last edited by RadAudit on Fri Aug 06, 2021 4:48 pm, edited 1 time in total.
FI is the best revenge. LBYM. Invest the rest. Stay the course. Die anyway. - PS: The cavalry isn't coming, kids. You are on your own.
User avatar
samsoes
Posts: 2794
Joined: Tue Mar 05, 2013 8:12 am
Location: Northeast Rat Race

Re: SECURES Act and family inheritance question

Post by samsoes »

Regarding inherited IRAs, isn't the method/timing of distribution up to the beneficiaries (who can make withdrawals whenever they choose as long as the account is empty after 10 years)?
"Happiness Is Not My Companion" - Gen. Gouverneur K. Warren. | (Avatar is the statue of Gen. Warren atop Little Round Top @ Gettysburg National Military Park.)
Topic Author
RadAudit
Posts: 4384
Joined: Mon May 26, 2008 10:20 am
Location: Second star on the right and straight on 'til morning

Re: SECURES Act and family inheritance question

Post by RadAudit »

samsoes wrote: Wed Aug 04, 2021 11:03 am Regarding inherited IRAs, isn't the method/timing of distribution up to the beneficiaries (who can make withdrawals whenever they choose as long as the account is empty after 10 years)?
Well, there is that.
FI is the best revenge. LBYM. Invest the rest. Stay the course. Die anyway. - PS: The cavalry isn't coming, kids. You are on your own.
StartedAt22
Posts: 112
Joined: Sat Mar 06, 2021 9:26 pm
Location: Over Yonder

Re: SECURES Act and family inheritance question

Post by StartedAt22 »

RadAudit wrote: Wed Aug 04, 2021 10:58 am I've just returned from the estate lawyer and the chat included changing the trust to update it IAW some of the provisions of the SECURES Act. A few concerns came up.

My plan was / is after DW and I die to split the (small) estate (two mutual funds in tax deferred, a house and a little cash) into two trusts 50/50 and leave it to the kids. I'm 74. DW is 70. Kids are 40 and 35. There are two grandkids, so far. According to the SECURES Act, AFAIK, the proceeds from the fund have to be distributed within ten years after death. We chose via bloodlines for various reasons.

The lawyer suggested having the funds sit tax deferred after our death in the mutual funds for 10 years, then sell them, pay the taxes and roll on with the remaining money in the various new trusts. (Lawyer doesn't like paying taxes. Thinks this results in more money for the kids.)

My concern is what to do. Option 1 is go with my current plan. Option 2 is to go with some modification of what the lawyer suggests. I'm leaning toward what I've currently planned. Primarily because I don't know what will happen for the rest of the day much less 10 to 20 years from now. I don't like trying to control money from the grave. The kids expect 50/50 and should be bright to decide among options available to them at that time. If not, I failed anyway.

What say you about distributing estate to increase wealth to the kids?
Could let it sit, and have your kids drawn after the 10 year mark. Could pull it now, pay taxes, invest in taxable, and gift at a "stepped up basis" meaning no tax is incurred by heirs. Ultimately, it comes down to an analysis of your heirs tax brackets, and yours, and determining what path gets the most money in your heirs pocket after taxes.
A task begun is nearly half complete | Enough is as good as a feast | Risk: Ensure your goals can be met even under worst case scenario and be realistic.
sailaway
Posts: 8188
Joined: Fri May 12, 2017 1:11 pm

Re: SECURES Act and family inheritance question

Post by sailaway »

StartedAt22 wrote: Wed Aug 04, 2021 11:15 am
RadAudit wrote: Wed Aug 04, 2021 10:58 am I've just returned from the estate lawyer and the chat included changing the trust to update it IAW some of the provisions of the SECURES Act. A few concerns came up.

My plan was / is after DW and I die to split the (small) estate (two mutual funds in tax deferred, a house and a little cash) into two trusts 50/50 and leave it to the kids. I'm 74. DW is 70. Kids are 40 and 35. There are two grandkids, so far. According to the SECURES Act, AFAIK, the proceeds from the fund have to be distributed within ten years after death. We chose via bloodlines for various reasons.

The lawyer suggested having the funds sit tax deferred after our death in the mutual funds for 10 years, then sell them, pay the taxes and roll on with the remaining money in the various new trusts. (Lawyer doesn't like paying taxes. Thinks this results in more money for the kids.)

My concern is what to do. Option 1 is go with my current plan. Option 2 is to go with some modification of what the lawyer suggests. I'm leaning toward what I've currently planned. Primarily because I don't know what will happen for the rest of the day much less 10 to 20 years from now. I don't like trying to control money from the grave. The kids expect 50/50 and should be bright to decide among options available to them at that time. If not, I failed anyway.

What say you about distributing estate to increase wealth to the kids?
Could let it sit, and have your kids drawn after the 10 year mark. Could pull it now, pay taxes, invest in taxable, and gift at a "stepped up basis" meaning no tax is incurred by heirs. Ultimately, it comes down to an analysis of your heirs tax brackets, and yours, and determining what path gets the most money in your heirs pocket after taxes.
Could convert to Roth and let the kids keep it in tax sheltered even longer.
User avatar
Lee_WSP
Posts: 10346
Joined: Fri Apr 19, 2019 5:15 pm
Location: Arizona

Re: SECURES Act and family inheritance question

Post by Lee_WSP »

RadAudit wrote: Wed Aug 04, 2021 10:58 am The lawyer suggested having the funds sit tax deferred after our death in the mutual funds for 10 years, then sell them, pay the taxes and roll on with the remaining money in the various new trusts. (Lawyer doesn't like paying taxes. Thinks this results in more money for the kids.)
If the goal is to keep the money in trust as long as possible, then you should convert it to Roth during your lifetime as the taxes will be lower. Trusts are taxed at the highest rate pretty quickly.

However, are you sure that is what you'd like to happen? If your estate plus your children's estate is unlikely to be above the 2026 lifetime exemption, there are no estate tax savings to be had. Whereas the income taxes will be fairly high.

If you do not need to keep the TDAs in trust and your children are not in the highest 2 brackets, then you can designate your children directly and they can spread out the ten year distributions. I'm assuming you are cross referencing each other and this plan is for the second to die.
BreadandButter
Posts: 126
Joined: Tue Jun 15, 2021 1:07 pm

Re: SECURES Act and family inheritance question

Post by BreadandButter »

You don't say what was your reason for the inheritances to go into trusts under your original plan.
User avatar
KingRiggs
Posts: 1149
Joined: Wed Dec 12, 2018 11:19 am
Location: Indiana

Re: SECURES Act and family inheritance question

Post by KingRiggs »

Your "kids" are adults...

Why does the money need to go into a trust?

Can they not decide what is best for themselves individually? One might need the money right away, and therefore incur the taxes while the other might defer 10 years to maximize gains. Individual circumstances determine what is "right".
Advice = noun | Advise = verb | | Roth, not ROTH | | "Remember, there's always money in the banana stand." - George Bluth, Sr.
User avatar
LadyGeek
Site Admin
Posts: 95466
Joined: Sat Dec 20, 2008 4:34 pm
Location: Philadelphia
Contact:

Re: SECURE Act and family inheritance question

Post by LadyGeek »

FYI - I fixed a typo in the thread title SECURES to SECURE, which is the Setting Every Community Up for Retirement Enhancement (SECURE) Act.
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.
User avatar
illumination
Posts: 3160
Joined: Tue Apr 02, 2019 6:13 pm

Re: SECURE Act and family inheritance question

Post by illumination »

In your original post you said the estate was "small". I'm not sure what that number means, but my non-expert opinion is small estates shouldn't be fooling with a lot of complicated trusts. And your "kids" will probably be near 50 years old when they inherit it, just don't see much reason for it.

Just make sure your will is current and you have your retirement accounts set up properly with the correct beneficiaries. If they inherit something like an IRA, they will get 10 years where it will be sheltered inside the account and it can removed when they want to (and the taxes paid). After 10 years, the balance needs to be removed completely. If its put in a Roth IRA, they also get 10 years, but then it comes out tax free. You don't need a lawyer to set up a trust for your beneficiaries get this "tax benefit" after you die from your retirement accounts (unless you want to). It's just encoded in the law. You simply contact the custodian and insert their names, no trust needed.
Topic Author
RadAudit
Posts: 4384
Joined: Mon May 26, 2008 10:20 am
Location: Second star on the right and straight on 'til morning

Re: SECURE Act and family inheritance question

Post by RadAudit »

StartedAt22 wrote: Wed Aug 04, 2021 11:15 am Could let it sit, and have your kids drawn after the 10 year mark. Could pull it now, pay taxes, invest in taxable, and gift at a "stepped up basis" meaning no tax is incurred by heirs. Ultimately, it comes down to an analysis of your heirs tax brackets, and yours, and determining what path gets the most money in your heirs pocket after taxes.
Letting the kids draw it after 10 years is essentially one of the options that should be open to them. I suspect that one of the kids will grab their 1/2 and go.

Thanks for the idea of pulling the money now and paying the taxes. I'm having a rough time figuring that out and how to sell it to the kids. Working on that one.
Last edited by RadAudit on Wed Aug 04, 2021 2:54 pm, edited 2 times in total.
FI is the best revenge. LBYM. Invest the rest. Stay the course. Die anyway. - PS: The cavalry isn't coming, kids. You are on your own.
Topic Author
RadAudit
Posts: 4384
Joined: Mon May 26, 2008 10:20 am
Location: Second star on the right and straight on 'til morning

Re: SECURE Act and family inheritance question

Post by RadAudit »

BreadandButter wrote: Wed Aug 04, 2021 12:05 pm You don't say what was your reason for the inheritances to go into trusts under your original plan.
Let's just say the first SIL and the second SIL gave us some cause for concern about letting them get their hands on the money via distribution via the IRAs to the kids.
FI is the best revenge. LBYM. Invest the rest. Stay the course. Die anyway. - PS: The cavalry isn't coming, kids. You are on your own.
BreadandButter
Posts: 126
Joined: Tue Jun 15, 2021 1:07 pm

Re: SECURE Act and family inheritance question

Post by BreadandButter »

You could privately tell each kid that inheritances are their separate property. See if they are aware of this. Are they concerned?
Topic Author
RadAudit
Posts: 4384
Joined: Mon May 26, 2008 10:20 am
Location: Second star on the right and straight on 'til morning

Re: SECURE Act and family inheritance question

Post by RadAudit »

KingRiggs wrote: Wed Aug 04, 2021 12:10 pm Can they not decide what is best for themselves individually? One might need the money right away, and therefore incur the taxes while the other might defer 10 years to maximize gains. Individual circumstances determine what is "right".
Good point. Hopefully the trust will give them that option and they can figure out what's right for them.
Last edited by RadAudit on Wed Aug 04, 2021 2:51 pm, edited 1 time in total.
FI is the best revenge. LBYM. Invest the rest. Stay the course. Die anyway. - PS: The cavalry isn't coming, kids. You are on your own.
Topic Author
RadAudit
Posts: 4384
Joined: Mon May 26, 2008 10:20 am
Location: Second star on the right and straight on 'til morning

Re: SECURE Act and family inheritance question

Post by RadAudit »

illumination wrote: Wed Aug 04, 2021 1:05 pm If they inherit something like an IRA, they will get 10 years where it will be sheltered inside the account and it can removed when they want to (and the taxes paid). After 10 years, the balance needs to be removed completely. If its put in a Roth IRA, they also get 10 years, but then it comes out tax free. You don't need a lawyer to set up a trust for your beneficiaries get this "tax benefit" after you die from your retirement accounts (unless you want to). It's just encoded in the law. You simply contact the custodian and insert their names, no trust needed.
Thanks. Didn't know that.
FI is the best revenge. LBYM. Invest the rest. Stay the course. Die anyway. - PS: The cavalry isn't coming, kids. You are on your own.
Topic Author
RadAudit
Posts: 4384
Joined: Mon May 26, 2008 10:20 am
Location: Second star on the right and straight on 'til morning

Re: SECURE Act and family inheritance question

Post by RadAudit »

BreadandButter wrote: Wed Aug 04, 2021 2:39 pm You could privately tell each kid that inheritances are their separate property. See if they are aware of this. Are they concerned?
Each is aware they get 1/2 of what's left.
FI is the best revenge. LBYM. Invest the rest. Stay the course. Die anyway. - PS: The cavalry isn't coming, kids. You are on your own.
User avatar
WoodSpinner
Posts: 3499
Joined: Mon Feb 27, 2017 12:15 pm

Re: SECURES Act and family inheritance question

Post by WoodSpinner »

sailaway wrote: Wed Aug 04, 2021 11:23 am
Could convert to Roth and let the kids keep it in tax sheltered even longer.
Actually that you cannot do!

Inherited IRAs are not eligible for Roth Conversions.

WoodSpinner
WoodSpinner
BreadandButter
Posts: 126
Joined: Tue Jun 15, 2021 1:07 pm

Re: SECURE Act and family inheritance question

Post by BreadandButter »

Separate property means the spouse does not have access to the money unless it is co-mingled with joint accounts.
sailaway
Posts: 8188
Joined: Fri May 12, 2017 1:11 pm

Re: SECURES Act and family inheritance question

Post by sailaway »

WoodSpinner wrote: Wed Aug 04, 2021 2:54 pm
sailaway wrote: Wed Aug 04, 2021 11:23 am
Could convert to Roth and let the kids keep it in tax sheltered even longer.
Actually that you cannot do!

Inherited IRAs are not eligible for Roth Conversions.

WoodSpinner
If you look at all the quotes, I was suggesting a Roth conversion for the OP, as opposed to someone else suggesting they pay the tax and keep it taxable for the kids to inherit with the stepped up basis.
User avatar
Watty
Posts: 28813
Joined: Wed Oct 10, 2007 3:55 pm

Re: SECURE Act and family inheritance question

Post by Watty »

This is one situation that I know happened that you should talk to your lawyer about.

1) Retired couple with a seven figure net worth sets up their paperwork so that the spouse would inherit everything when one of them dies then the kids would get whatever is left when the second of them dies.

2) Husband dies and wife inherits everything.

3) A couple of years later the widowed wife is lonely and remarries a guy that has kids from a previous marriage.

4) The couple set up their paperwork so that when one of them dies the new spouse will get everything, then when they die both sets of kids would get a proportional share of the estate.

5) Wife dies and second husband inherits everything.

6) Second husband changes his will and beneficiaries so that only his kids will get any inherence.

7) Second husband dies and his kids get everything.

8) The original couples kids check with a lawyer and there is nothing that can be done even though there is some question about if the wife had early dementia when the wills were changed. They have to struggle with the other set of kids to even get things like family photos out of the house.

Anyway you should likely be a lot more worried about what will happen with the funds during your lifetime than long after you are dead. From your post it was not clear if your plans would prevent something like this from happening.
Topic Author
RadAudit
Posts: 4384
Joined: Mon May 26, 2008 10:20 am
Location: Second star on the right and straight on 'til morning

Re: SECURE Act and family inheritance question

Post by RadAudit »

Watty wrote: Wed Aug 04, 2021 3:19 pm Anyway you should likely be a lot more worried about what will happen with the funds during your lifetime than long after you are dead. From your post it was not clear if your plans would prevent something like this from happening.
I can only control so much. If my surviving DW wants to put her kids inheritances at risk, there'll be little I can do to stop it. But, you are correct, I'm concerned with what happens to the funds before I check out.
FI is the best revenge. LBYM. Invest the rest. Stay the course. Die anyway. - PS: The cavalry isn't coming, kids. You are on your own.
delamer
Posts: 17348
Joined: Tue Feb 08, 2011 5:13 pm

Re: SECURE Act and family inheritance question

Post by delamer »

Can you restrict how your kids empty an Inherited IRA by putting it in a trust? And, if so, can the money taken out of the IRA then be kept in the trust?

Unless I’m misunderstanding what the attorney is suggesting in the original post.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
User avatar
Lee_WSP
Posts: 10346
Joined: Fri Apr 19, 2019 5:15 pm
Location: Arizona

Re: SECURE Act and family inheritance question

Post by Lee_WSP »

delamer wrote: Wed Aug 04, 2021 4:41 pm Can you restrict how your kids empty an Inherited IRA by putting it in a trust? And, if so, can the money taken out of the IRA then be kept in the trust?

Unless I’m misunderstanding what the attorney is suggesting in the original post.
Yes, but not exactly.

The trustee (if given discretion) may choose to withdraw the funds along whichever timeline she chooses. She may likewise choose to distribute the funds to the beneficiaries who will then report the income on their own tax returns.

The trust could be constructed to allow the trustee no discretion and he will not be able to choose the distribution schedule (not that it matters) and the distributions would be kept in further trust. Since the funds were not distributed, they would be taxed to the trust, at compressed trust income brackets and subject to the highest rates at the time.

If the trust is constructed to allow no discretion on timing, but mandates or allows distributions, then the SECURE act as currently regulated will empty the account in year 10 and the entire distribution will be passed on to the beneficiaries in one large lump sum or the previous scenario will occur if the trustee determines keeping it in further trust is beneficial.
Alan S.
Posts: 12629
Joined: Mon May 16, 2011 6:07 pm
Location: Prescott, AZ

Re: SECURE Act and family inheritance question

Post by Alan S. »

RadAudit wrote: Wed Aug 04, 2021 2:34 pm
BreadandButter wrote: Wed Aug 04, 2021 12:05 pm You don't say what was your reason for the inheritances to go into trusts under your original plan.
Let's just say the first SIL and the second SIL gave us some cause for concern about letting them get their hands on the money via distribution via the IRAs to the kids.
In a divorce settlement, a trust provides better protection against marital settlements that just owning separate property acquired by inheritance. See "equitable distribution" below:
Equitable distribution.
In all other (common law) states, assets and earnings accumulated during marriage are divided equitably (fairly), but not necessarily equally. In some of those states, the judge may order one party to use separate property to make the settlement fair to both spouses.
User avatar
WoodSpinner
Posts: 3499
Joined: Mon Feb 27, 2017 12:15 pm

Re: SECURES Act and family inheritance question

Post by WoodSpinner »

sailaway wrote: Wed Aug 04, 2021 2:58 pm
WoodSpinner wrote: Wed Aug 04, 2021 2:54 pm
sailaway wrote: Wed Aug 04, 2021 11:23 am
Could convert to Roth and let the kids keep it in tax sheltered even longer.
Actually that you cannot do!

Inherited IRAs are not eligible for Roth Conversions.

WoodSpinner
If you look at all the quotes, I was suggesting a Roth conversion for the OP, as opposed to someone else suggesting they pay the tax and keep it taxable for the kids to inherit with the stepped up basis.
Missed that, my apologies… :oops:
WoodSpinner
RetiredCSProf
Posts: 1226
Joined: Tue Feb 28, 2017 3:59 pm

Re: SECURE Act and family inheritance question

Post by RetiredCSProf »

Is there any benefit to making a trust a beneficiary of a tax-deferred IRA? I had considered this (before SECURE Act) and decided against it. Does loss of the stretch IRA make this somehow a better option than naming individuals as beneficiaries?
Alan S.
Posts: 12629
Joined: Mon May 16, 2011 6:07 pm
Location: Prescott, AZ

Re: SECURE Act and family inheritance question

Post by Alan S. »

RetiredCSProf wrote: Wed Aug 04, 2021 7:53 pm Is there any benefit to making a trust a beneficiary of a tax-deferred IRA? I had considered this (before SECURE Act) and decided against it. Does loss of the stretch IRA make this somehow a better option than naming individuals as beneficiaries?
The benefits of a trust are about the same as before (creditor protection, spendthrift protection, estate tax avoidance for high net worth people, etc).

But the Secure Act has curtailed the non spouse beneficiary stretch for both trusts and individual beneficiaries, which is what Congress intended. The Supreme Court ruled that the non spouse inherited accounts were not to be treated as retirement funds after the owner passed, and this started with curtailing creditor protection for inherited accounts (except in the few states that passed their own statutes). Once the creditor protection was eroded, it was a small step to curtail the applicable distribution period (aka stretch) and use the accelerated tax revenue to pay for other expanded retirement options for owners rather than beneficiaries.

Certain owners can still generate a surrogate stretch by leaving their IRA to a charitable remainder trust, but of course that involves allocating some portion of the IRA to the charity who will inherit it. There are also a few cases when the IRA owner passed after the RBD, and leaves the IRA to a non qualified trust, the beneficiary of that trust will be able to take distributions over the remaining life expectancy of the decedent instead of the 10 year rule. But that only works if the IRA owner passes when not older than 80, or their remaining LE will be less than 10 years, so this is of limited help.
Joey Jo Jo Jr
Posts: 553
Joined: Mon Jun 21, 2021 11:38 pm

Re: SECURE Act and family inheritance question

Post by Joey Jo Jo Jr »

I think there are three basic options for tax deferred retirement accounts that you want to benefit people not entitled to the stretch:

1) leave to them directly and let them decide when to withdraw
2) leave to a trust for there benefit and let trustee decide when to withdraw AND when to distribute to them, which may be after the 10 year withdraw limit
3) leave to a trust and limit trustee’s discretion as to withdrawals and/or distributions

All other things being equal, I favor #2 assuming you’ve already got a trust and trustee in place. Let them do what you created them to do in the first place; protect assets in the trust and allow trustee to time distributions based on then-known factors that you can only guess at today.
User avatar
tarnation
Posts: 2544
Joined: Thu Apr 26, 2007 12:36 am

Re: SECURE Act and family inheritance question

Post by tarnation »

Any thoughts about leaving to grandchildren? They may get a longer stretch and or be in lower brackets.
Image
Topic Author
RadAudit
Posts: 4384
Joined: Mon May 26, 2008 10:20 am
Location: Second star on the right and straight on 'til morning

Re: SECURE Act and family inheritance question

Post by RadAudit »

Thank you one and all. You've given me a great deal to think through. Can't say I'll be back with the results. Probably won't know until I figure out how the grandkids turn out in 70 years or so.
FI is the best revenge. LBYM. Invest the rest. Stay the course. Die anyway. - PS: The cavalry isn't coming, kids. You are on your own.
bsteiner
Posts: 9151
Joined: Sat Oct 20, 2012 9:39 pm
Location: NYC/NJ/FL

Re: SECURE Act and family inheritance question

Post by bsteiner »

Joey Jo Jo Jr wrote: Wed Aug 04, 2021 9:05 pm I think there are three basic options for tax deferred retirement accounts that you want to benefit people not entitled to the stretch:

1) leave to them directly and let them decide when to withdraw
2) leave to a trust for there benefit and let trustee decide when to withdraw AND when to distribute to them, which may be after the 10 year withdraw limit
3) leave to a trust and limit trustee’s discretion as to withdrawals and/or distributions

All other things being equal, I favor #2 assuming you’ve already got a trust and trustee in place. Let them do what you created them to do in the first place; protect assets in the trust and allow trustee to time distributions based on then-known factors that you can only guess at today.
Correct. Unless each child's share of the IRA is too small to warrant setting up trusts for the children, door #2 will almost always be the best choice.

As others have noted, absent the stretch, unless the trustees distribute the IRA benefits they receive (which gives up the protections of the stretch), the IRA benefits will likely be taxable at higher rates. The initial poster may wish to consider doing some Roth conversions so the trustees can decide on distributions without regard to income taxes.
User avatar
WoodSpinner
Posts: 3499
Joined: Mon Feb 27, 2017 12:15 pm

Re: SECURE Act and family inheritance question

Post by WoodSpinner »

tarnation wrote: Wed Aug 04, 2021 10:58 pm Any thoughts about leaving to grandchildren? They may get a longer stretch and or be in lower brackets.
Ummm….

Why do you think grandchildren would get a longer stretch? They would not based on Secure act. Only your children would …

WoodSpinner
WoodSpinner
User avatar
22twain
Posts: 4016
Joined: Thu May 10, 2012 5:42 pm

Re: SECURE Act and family inheritance question

Post by 22twain »

RadAudit wrote: Wed Aug 04, 2021 2:47 pm
BreadandButter wrote: Wed Aug 04, 2021 2:39 pm You could privately tell each kid that inheritances are their separate property. See if they are aware of this. Are they concerned?
Each is aware they get 1/2 of what's left.
I think BreadandButter is referring to marital finances here: "separate property" versus "joint property." IIRC, inheritances are normally considered to be separate property and therefore not subject to division in a divorce, provided that they are kept in separate accounts and not commingled with joint property.
Meet my pet, Peeve, who loves to convert non-acronyms into acronyms: FED, ROTH, CASH, IVY, ...
User avatar
tarnation
Posts: 2544
Joined: Thu Apr 26, 2007 12:36 am

Re: SECURE Act and family inheritance question

Post by tarnation »

WoodSpinner wrote: Thu Aug 05, 2021 8:48 am
tarnation wrote: Wed Aug 04, 2021 10:58 pm Any thoughts about leaving to grandchildren? They may get a longer stretch and or be in lower brackets.
Ummm….

Why do you think grandchildren would get a longer stretch? They would not based on Secure act. Only your children would …

WoodSpinner
I thought is was all minors. I see now is it only minor children of decedent.
Image
User avatar
WoodSpinner
Posts: 3499
Joined: Mon Feb 27, 2017 12:15 pm

Re: SECURE Act and family inheritance question

Post by WoodSpinner »

tarnation wrote: Thu Aug 05, 2021 9:03 am
WoodSpinner wrote: Thu Aug 05, 2021 8:48 am
tarnation wrote: Wed Aug 04, 2021 10:58 pm Any thoughts about leaving to grandchildren? They may get a longer stretch and or be in lower brackets.
Ummm….

Why do you think grandchildren would get a longer stretch? They would not based on Secure act. Only your children would …

WoodSpinner
I thought is was all minors. I see now is it only minor children of decedent.
So did I, just heard about it in the “Retirement and IRA Show” podcast…..

:oops:

WoodSpinner
WoodSpinner
Post Reply