This means a “qualifying trust” or “see through trust” can still be used to stretch the distribution period for a beneficiary. An individual who is not more than 10 years younger than the decedent.Ī trust may still be a beneficiary under the secure Act however, the new ten year rule also applies to trusts.
The child of the decedent who is a minor (note that this exception is narrowly drawn for example, it does not apply to grandchildren even if the child predeceased the participant-so, no “predeceased child step-up” rule as exists for GST).The five types of eligible designated beneficiaries are: The law contains five categories of beneficiaries known as an “eligible designated beneficiary” for whom the new 10 year rule does not apply. While the SECURE Act eliminates stretching an IRA beyond 10 years for many beneficiaries, it does contain some exceptions. Meaning, an IRA now must be distributed to the beneficiary by the tenth year following the year in which the retirement account owner dies. The beneficiaries of an IRA are no longer able to stretch certain inherited IRAs over their life expectancy under the SECURE Act.
The Secure Act Eliminates the “Stretch” IRA The law also makes dramatic changes with regard to the role of a trust as a beneficiary of a retirement account. The SECURE Act makes substantial changes to the law affecting retirement plans. The Setting Every Community Up for Retirement Enhancement Act of 2019, commonly known as the SECURE act, became effective on January 1, 2020.
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