New SECURE Act May Significantly Impact Existing Estate Plans

In late December of 2019, Congress passed the SECURE Act, a new federal law which may significantly impact existing estate plans, particularly for people who have named a trust as beneficiary of a retirement account. As a result of this new legislation, individuals may need to change retirement account beneficiary designations, their Wills, or both.

The provisions of the SECURE Act apply to retirement account owners who die after December 31, 2019. The key aspects of the new law as they relate to estate planning are as follows:

End of Stretch-out for Most Inherited Retirement Accounts

Previous law allowed a beneficiary of an inherited retirement account to defer distributions (and the income tax thereon) over the beneficiary’s life expectancy. Due to changes implemented under the SECURE Act, most accounts must be distributed to the beneficiary by the end of the 10th year after the account owner’s death.


Distributions made from an inherited retirement account may still be stretched over the beneficiary’s life expectancy when the beneficiary is the account owner’s spouse, a chronically ill or disabled individual, or an individual who is not more than 10 years younger than the account holder.

Minor Children Beneficiaries

There is also a partial exception for an account owner’s minor children. In that case, the 10-year distribution period will begin when the child turns 18. This exception does not apply to grandchildren or other beneficiaries who are under 18.

Income Tax Impact 

Because distributions may no longer be stretched out for life, a beneficiary will likely be required to receive larger payments from the retirement account. This may result in increased aggregate income tax consequences to most beneficiaries.

Many estate plans designate one or more trusts as beneficiaries of retirement accounts, and are designed to allow the retirement account distributions to be stretched out over the trust beneficiary’s life expectancy. In many cases, it may no longer be appropriate to name a trust as retirement account beneficiary, or it may be advisable to revise the trust provisions contained in the Wills. 

Each person’s specific situation will determine whether any changes are needed. Because the SECURE Act is already in effect, now is a good time to review your estate planning documents and retirement account beneficiary designations. If you have named a trust as retirement account beneficiary and need assistance with updating your documents (or if you have questions about how the SECURE Act has impacted other aspects of estate planning), please contact an attorney in our estate planning practice group, including Kara Kalenius Novak ( or Allison Int-Hout (

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