TIPS OF THE TRADE: IRA PLANNINGâGAINING SECURITY IN A POST-SECURE WORLD
Written by Lisa B. Roper, Esq.*
After expanding tax incentives for Individual Retirement Accounts ("IRAs") for nearly fifty years, IRAs became a valuable estate planning and tax deferment tool. Congress passed The Setting Every Community Up for Retirement Enhancement Act of 2019 ("SECURE"), followed closely by The Securing a Strong Retirement Act of 2021 ("SECURE II"). SECURE and SECURE II changed the landscape for participants and estate planners alike and effectively clawed back many of the benefits to which they had become accustomed. The result is a new and complicated set of rules for beneficiaries who inherit IRAs from participant owners. Many of these rules are still being interpreted and articulated by the IRS and thus also practicing professionals. This article summarizes the law applicable to inherited IRAs as they stand today. This article also identifies areas in estate planning that may become increasingly important because of the sweeping changes to taxation of inherited IRAs.
II. A LOOK BACK: A BRIEF HISTORY OF IRA LEGISLATION OVER TIME