Gassmanlaw.com



30 Seconds To Understand The SECURE Act1.2.2030 minutesAlan Gassman, Christopher Denicolo & Brandon KetronTranscription by TEMISpeaker 1:00:05Hi, this is Alan Gassman and I am here with Christina colo, Brandon Katrin and Clearwater beach and we are going to talk about something very exciting, something very interesting and something less confusing than it was before and that is the secure act. So if this is the first webinar that you're watching in the second decade of the 20th century of mankind, we welcome you. If it's not, you're welcome. Anyway, we're going to go through a lot of things today. Let me mention we have other webinars coming up. 10 must follow rules to leverage your personal assistant. You should watch that with your secretary on January 9th a criticism of certain life insurance arrangements including premium financing will be January 16th Christopher Dina colo on explaining the installment sale to an effective grant or trust with great slides that you can use for your clients. January 23rd and even more webinars. I'm going to be hosting a practice acceleration workshop for estate planners in Tampa with net world, not world renowned leader and author Srikumar Rao.Speaker 1:01:22That's going to be very interesting. And now we turn to Brandon Katrin to tell us some of the main non IRA inheritance provisions under the secure act random. Yeah, so these are just a little overview of what's changed here besides the elimination of the stretch IRA to change that to just a 10 year rule for certain beneficiaries that you're going to talk about the future slides. But other than that, one of the things that they did change is now the beginning day before you have to start taking required minimum distributions has been increased from the age of 70 and a half to 72 so you get additional two years there. But if you turn 70 and a half in 2019 you're still required to take your requirement on distributions and you don't get to delay until you're 72 so if you've already started taking minimum distributions, same rules apply.Speaker 1:02:12Another thing that they have changed is now you can continue to contribute to your IRA once you start taking distributions under prior law, once you started taking minimum distributions, you weren't allowed to contribute in anything. Now you can, but as long as you have earned income. So if you're retired and you're just living off your IRA or others, a security that is not going to allow you to contribute to your IRA. But if you're still receiving a wage, you can still contribute to that IRA past 72 or 70 and a half. Now there is a new exception added to the excise tax, which applies if you start taking distributions before you reach 59 and a half, there'd be a 10 cent, 10% excise tax on those distributions. But now if you have a childbirth or you adopt a child, you can withdraw up to $5,000 without that 10% penalty.Speaker 1:02:58Appalling. Another thing that changed outside the IRA or you know, is to, um, section five, 29 plans. Those can now be used to pay for certain apprenticeship programs, including any supplies or fees or equipment used in this programs. And then also you can now use up to $10,000 to repay your student loans. Um, another change is to the kitty tax. We reverted now back to the prior law where income of a child that's earned earned would be taxed at the parent's rate. Um, they changed that as part of the tax cuts and job red jobs act to go to the trust and estate brackets. But that's not going to apply anymore. And you can actually go ahead and amend those 2018 returns and elect to have the prior law apply for the parents rate bracket would apply and not the trust in the state brackets.Speaker 1:03:45And then finally they have moved the due date for the establishment of the new plan and to the due date of your tax return, including extensions. So even if you don't get a plan established by the end of the year, you get that established and set up before the due date of your tax return and seem it to be set up. And that's just a couple of new changes there. And now we're going to move on to some of the more, um, probably relevant changes here, which is the changes to the minimum distribution requirements. And, okay, I just want to mention this kitty tax is going to be a nice opportunity for people with grandchildren. Cause if you're a fluent, you know what in the highest tax bracket anyway, but your children and your inlaws may not be in the highest bracket. So when you have clients with grandchildren and you'd like to spray some income at them, especially if you can form section six 78 trusts and uh, get the differential in the income tax bracket, that's going to be very valuable.Speaker 1:04:43And it's interesting that that applies not only in 2020 but to 2019 and you can even amend returns and go back to 2018 and then by plan at the bottom of page seven, we mean a pension plan. So it used to be that you would have to set up a pension plan before the end of December 31st for most small businesses. Now you have until the next March 15th. So that's gonna that's going to give people a lot of leverage. So Chris, before we start looking at charts, cause I know we're going to be doing a lot of looking at charts here in the next 27 minutes, what are the main differences between the minimum distribution roles that applied a couple of weeks ago and the minimum distributions that apply today? Okay, I'll, there's two main rules that I think we all need to know. What applies during life. One applies after death.Speaker 1:05:37The first set applies during life. Brandon has mentioned already, which is the required beginning date has now determined with reference to the year where the IRA owner or pension plan participant reaches the age of 72 not with reference to 70 and a half. So there's essentially an 18 month benefit given to the taxpayers before they have to start taking distributions. That's the lifetime required minimum distribution rule. That has changed now on the debt side after death under prior law. If you left an IRA to an individual or to a trust that qualifies as something known as a see-through trust, then you can stretch out benefits over the life expectancies of a beneficiary of the IRA. That role is largely been eliminated with five exceptions. So that life we call that will the life expectancy rule. It's been replaced essentially by a 10 year rule, which says instead of life expectancy you have to take out all retirement plan, distribute or all retirement plan assets by December 31 of the 10th year after the year of death.Speaker 1:06:46So if I die right now today, okay my, my beneficiaries who are not in these five categories that we'll talk about in a minute has to take all assets out of my retirement plan no later than December 31 2031 so that's the main, that's the key significant difference that the new law brings were required minimum distribution planning as opposed to the old wall. So I'll say that again cause I know everybody's getting used to this. I had a call today from one of our best clients and he said, what's the difference? And I said, well Floyd, when you die Mary, your wife can still roll the IRA over to her own IRA. That doesn't change at all. She doesn't have to start taking distributions until the year after she's turned age 72 not much has changed there. If you want her to disclaim it to a Q-tip lifetime income trust, that can still qualify as what they would call a conduit trust, where she could take it out over life expectancy.Speaker 1:07:52Not a lot has changed there, but the big difference Floyd is when on the death of the survivor of you and Mary, we can't have IRAs that pay out over the life expectancy of your adult children. They're going to have to come out within 10 years after the death of the survivor, you and Mary. Otherwise there really hasn't been any change, any significant change for the vast majority of Americans and for the majority of our clients, am I right or only with married couples? And as I say it, there are five exceptions and sometimes the exception small, the rule with married couples, the exceptions falls the rule because the spouse is one of the exceptions, right? So if you leave an IRA to a spouse, the spouse can still roll it over into his or her own. They can still let you take it as a beneficiary if they would like a, in which case if you get the same lifetime stretch that occurred under prior law, but if there's no spouse, you have to fall within one of the four other exceptions and those exceptions to state them quickly.Speaker 1:08:57Our chronically ill beneficiary, a disabled beneficiary, a beneficiary who is not more then 10 years younger, then the participant. Uh, those are, those are the big exceptions. And again, the spouse is the one that's going to apply in most cases for our clients. But after that, the spouse, we're going to be faced with this issue. Right? So do you guys want to take us through this chart on page eight on what's changed and what's the same? Sure, it's a good place to begin. So the first row there, the required beginning date is what I mentioned earlier. And then when Brandon mentioned at the outset of the presentation, the required beginning date is now calculated or determined with reference to age 72 and not age 70 and a half. So it's really the later of April, one of the year following the year in which the participant turns 72 or if the participant is not a 5% or more owner of the stock of the employer sponsoring the plan a, then you can postpone that required beginning date until April 1st of the year after the year in which the participant retires from employment.Speaker 1:10:05So that still was under prior law. Just now we calculate it with reference to age 72. As I mentioned, the life expectancy rule is largely been eliminated, uh, and has been replaced by this 10 year rule where all benefits have to be paid out within 10 years. Uh, that of course doesn't apply to spouses. So we'll, we'll get to the exceptions in more detail. Um, but that is looking from 35,000 feet. That's the large change for after death. The default rule under prior law hasn't changed. It's still applies in that if you leave an IRA to a non qualifying trust or to a nod individual like in a corporation or even most common, unfortunately these state of the participant, the benefits must be distributed out within five years or more. Specifically by December 31 of the year. That's five years after the death of the first sign of the uh, deceased participant.Speaker 1:11:03There is a little exception that existed under prior law that still exists. If the participant dies after reaching that required beginning date, uh, then they, the beneficiary can elect to take distributions as if the participant were still living. So basically according to the survey, the participants life expectancy, uh, as if the participant was the beneficiary of the, of the IRA. So that's still applies under current law. And think of those rules as kind of your default lowest level rule that's going to apply if all else fails. Uh, the worst case scenario, if you will. On the next slide, we have a few additional changes or considerations here. A conduit. Trust is a trust that qualifies for the or qualified under prior law as well as the life expectancy payout. It's a trust where all distributions from the IRA or plan have to be made directly to the designated beneficiary.Speaker 1:12:01That has not changed. The qualifications, still are the same for a conduit trust. The difference now is that a Conduent trust is only going to apply for that life expectancy rule or the lifetime stretch as it's sometimes known if one of those five beneficiaries apply a spouse, chronically ill or disabled beneficiary or a beneficiary not more than than 10 years. Uh, that that's the main wrinkle there under prior law. Another type of trust that qualified as one called an accumulation trust. And this trust was very attractive to a lot of planners because it allows the trustee to accumulate distributions from the retirement plan and hold them in a protective manner under a trust instrument. A prior law allowed the life expectancy rule, so the lifetime stretch to apply assuming that the trust qualified for um, this accumulation treatment as a see-through trust, meaning that we look through to see the beneficiaries whose life expectancies control current law has largely eliminated these trusts.Speaker 1:13:10Uh, the only exception where they apply is if it's an accumulation trust for the sole lifetime benefit of a disabled or chronically Obana this year. You can't even have an accumulation trust for a spouse because if you have that you're outside of this life expectancy rule and you must default now down to the 10 year rule which has replaced the life expectancy rule in most cases. But there will be situations where you leave a trust for a child and adult child and if you use an accumulation trust, you could use the tenure rules. That's correct. As opposed to a non qualifying trust where you would end up using a five. That's right. That's the point I was just going to make is that you go down from, if you think of the life expectancy rule at the top of the desirability is our ability pyramid. The next one down would be your 10 year rule.Speaker 1:13:59And the bottom rung is the five year rule. Or if you can use the at least as rapidly rule, which is that rule where you use this, this legal fiction of the deceased participants life expectancy for the rest of his, uh, his expectancy, whatever his, her expectancy, whatever it might be. That's correct. So inherited IRAs, you know, they, they still apply, uh, in, in somewhat of the same fashion in that, you know, you, you take these distributions, um, as required, a spouse has the ability to decide to roll over the inherited IRA or to maintain the IRA has a beneficiary. Uh, and the neat thing about an inherited IRA and not rolling it over is that it's a spouse or other beneficiary for that matter is under 59 and a half. They can take distributions out from the inherited IRA free of penalty from the 10% excise tax.Speaker 1:14:51So again, if I, if I die today and I leave my IRA to my spouse, she's under 59 and a half, she may want to consider to not roll it over because otherwise she wouldn't be able to access it until she reaches 59 and a half without paying the 10% excise tax. So an important point that has kind of maintained throughout the change in the law. Now on the next slide we get more into the nitty gritty of eligible designated beneficiaries and I mentioned the uh, the five and I kept saying four of them because I, I forgot that minor child is the one I couldn't think of. And that's of course the fifth one. So spouse, minor child of the plan participant and it must be a child. It can't be a monitor. Grandchild and minor niece of minor friend of the family. Disabled beneficiary is your third one.Speaker 1:15:38Chronically ill is your fourth and beneficiary of who is less than 10 years younger. Then the participant also falls within this category of eligible designated beneficiaries or EDB as they're sometimes known. Um, and there's a lot of nuances that apply here and I think, uh, yeah, it might be better to go to the next chart that we have to really get into them. We can explain how you should have gonna apply brand and you want to start walking us through this. Yeah, so I'll start with the surviving spouse situations. So the, you know, the first situation that's most common is the spouse just chooses to roll over the IRA into their own plan. Nothing has changed in that rural except for the fact that now instead of starting to take distributions at 17 and a half, it's been increased the age 72, you're still going to use that uniform life table.Speaker 1:16:27You're still going to get to recalculate annually, meaning that should go to the table. You find the spouse's age, you find the divisor and that gives me the requirement on distribution for each year. And you would do that each year. Now if the spouse then elects to take the IRA directly as an inherited IRA, which might be the case if they're under 59 and a half and need access to the plan where if they're a beneficiary potentially of a conduit trust, the rules still apply. The same way you're going to take the spouse's life expectancy, you're going to go to the single life table and not the uniform life table for beneficiaries and calculate the requirement of distribution each year. Now, the only time that that might not apply is if the spouse and the surviving spouse is older than the actual deceased beneficiary and the deceased beneficiary are, sorry not to share, but the deceased owner died after his or her required beginning date and that case you can elect to have the deceased owner's life expectancy apply and the spouse would take distributions over the seed, deceased owner's life expectancy, which would only be relevant if the surviving spouse is older than the actual deceased.Speaker 1:17:37Um, plan participant. And I'll go into the next slide here. We have two more situations that could apply. If the surviving spouse is the sole beneficiary of a conduit, then the same rules would apply as if there's a direct inherited beneficiary of the IRA. You would get to recalculate annually the requirement of distributions. You would go to the single life table, find the applicable devisor each year and determine the requirement of distribution. And again, you have that option of using the, the seas plan participants life expectancy, if that's a better payoff period. Then the actual surviving spouses distribution and everything that Brandon just said is really a continuation of prior law. The only wrinkle is that now the required beginning date is determined with reference to age 72 and not age 70 and a half. But the question now becomes a hold on. If the spouse gets this treatment, a life expectancy, if you're one of those five beneficiaries, well then what happens if the spouse dies and didn't roll over the IRA?Speaker 1:18:39Uh, and the answer that we found as well, the 10 year rule is going to apply at that point. So 10 years after the surviving spouse's death by December 31st. Um, then you, you have the, uh, the all requirement, all required minimum distributions are all distributions must come out of the plant at that point. Now you'll notice that we did not put accumulation trust for spouse yet and that's because on the next slide you'll see that an accumulation trust for the spouse, uh, does not carry with it. The, uh, the ability for the spouse to, uh, take this life expectancy rule instead, the 10 year rule applies for the benefit of the surviving spouse and all benefits must be paid out by December 31 of that 10 year rule. So when the spouse dies in an accumulation trust scenario, there's no change to the payout period because the 10 year rule applies.Speaker 1:19:34So that's going to be pretty horrific in a second marriage where you're showing you have a lot of your assets in an IRA, you want to benefit the spouse for life. If you don't use a conduit trust, then 10 years after you die, that income's going to spray out into the accumulation trust. You're going to pay the income early. Brandon, does that make a big difference as far as the total net return after taxes, when you pay the tax early? So fairly significant difference. And we have some charts later on in the slides. Let's see, I think it starts on slide 23 three let's go there. Let's go to slide 23 here. And by the way, if you want the slides to be sent to you, if you didn't receive them, let us know. Well, what does this tell us? So this really just compares the three options here for the surviving spouse and you know, just see the first column there, you have the spousal rollover where they roll it into their own IRA, they're allowed to delay those distributions.Speaker 1:20:26Stage 72 then you have the direct conduit trust beneficiary where you're taking payments out over the lifetime of their surviving spouse. But then if you leave it to an accumulation trust, even if it's worth a bit on this whole benefit of the surviving spouse that tenure rules DOE going to apply. So you can see the differences here. I mean if you look at age 80 if they're able to roll it over, you have 5.3 million left in the IRA. That's assuming a 6% rate of return and no spending on the distribution. But if it's left as a beneficiary, you only have 3.8 million because you're actually required to take those distributions and patient income taxes. But then as an accumulation trust beneficiary, when that 10 year rule applies, it's only 3.1 million. So you can see there's significant differences there as far as the timing of when you're actually going to pay those taxes and the ability to defer.Speaker 1:21:15You know, there's obviously much better delay. Those period of income taxes let the IRA cook is a much better result for the spouse. And we do have the backup slides and it has the how we arrived at these present value, what were the assumptions? So we had a 6% rate of return in the IRA after distribution for may, we applied a 37% tax and then put those distributions and just into an investment account that grew up 5% rate of return. And then added the two amounts together to get the totals. But they're on the next couple of slides as backup slides and we can send you to these in Excel as well. If you want to change those assumptions, very easy to change the rates of return so you can use those for clients who wanted to, you know, lay out a scenario with different rates of returns and different options for how you're going to do that beneficiary designation.Speaker 1:22:01So your clients with large IRAs and second marriage has really need to be contacted to start thinking about this. They may want to buy more life insurance, they might want to ask their senators and Congressman why they voted for this law. This did not seem like a bipartisan law, dah dah. It really seems a against the rich to so to speak type of law. Okay. Back to page 13. Hopefully this will be a lucky page for us. So this is where you have an IRA or retirement plan payable directly to uh, a non spouse beneficiary who does not meet the criteria for, for those eligible beneficiaries. So in this situation you, the life expectancy rule is off the table because you're not in that five person category or five type of person category. So the best you can hope for is the 10 year rule.Speaker 1:22:51So in most situations, the 10 year role is going to apply, although as we pointed out, if the decedent is past their required beginning date and they can begin that you can use to the scene is life expectancy if that's a faster payout. Interestingly, in a lot of situations between the ages of 72 to roughly 80 because of the life expectancy tables that you're going to be better off if you intentionally are defective with respect to this 10 year rule because the deceased person's life expectancy is lower than 10 years. And you know, maybe you have to take the annual payments. Um, but in any event you might come out ahead because the payments would be smaller than what would be required at the end of the 10 year period. So if I'm the beneficiary of an IRA and the person who left it to me was over 73 then I can elect, go, wait and take nothing out for the first 10 years and then have to take it all out in the 10th year or whatever combination I want.Speaker 1:23:52Or I could use the life expectancy of the 73 year old, it'd be requirement. And when do I have to decide which of those to take? I was a year by year as I think you have to decide by December 31 of the year after the year of death would be my or better yet backing up maybe even October 31 because one of the requirements are if you use a trust, uh, you have to provide the trust instrument by October 31 of the year after the death. So if a trust instrument is involved, then no, that's your date right there. You just don't meet that requirement. Right now, for most of our clients, these benefits are going into irrevocable trusts for children, right? They are qual the way we've drafted them. They will qualify as see-through through accumulation, tries to give that child at least the 10 year option and not be stuck with a five year option.Speaker 1:24:44That's correct. A lot. And I don't see any reason to use a conduit trust second the, their category of birth. Well, for this category of person though, because in a conduit trust, it would all have to come out in the 10th year, the year of the see-through accumulation trust. The trustee can accumulate it. That's correct. I don't know why anyone would use a conduit trust for anyone other than a surviving spouse. No one, even before this, you know, we've always maintained that the credit, the lack of creditor protection for the conduit trust, lack of trust protection made them not as attractive as accumulation trusts. Uh, so if you fall into those categories, so we go to the, to the next slide here, beginning with the minor child. Um, you know, as, as an example, uh, the, Hey, the minor child can use the life expectancy, but only until the minor child reaches the age of majority and majority is determined with reference to state law.Speaker 1:25:35Some States that's 18, some States that can be determined based upon what level of education the minor child is pursuing. Uh, so that's another little quirk in the law in that yes, you get the benefit for benefits for IRA plans, they're left, uh, either directly to or at a conduit trust for a minor child, but once they hit majority, the benefit dissolves and you have the 10 year rule that apply. So for Floridians, it's going to be life expectancy through age 18 and then a 10 year old flies, right? If it goes directly to the minor or if it goes to a properly drafted conduit, see-through trust or accumulation, see-through trust. But if it goes to an irrevocable trust that doesn't call a Phi as a see-through trust, then it's a five year. Right. So very interesting. And just to clarify that the life expectancy for the child would only apply if you'd like to, to a conduit trust.Speaker 1:26:33If you leave it to an accumulation trust, you're going to have the 10 year rule regardless of whether their beneficiary is a minor or not. That's just one clarification given how, you know, have a paucity of benefits. Like, you know, if you're, unless let's just say an unfortunate situation where you leave a child who's one year old and you get 17 years until the majority, I mean this is the life expectancy given by that really better than a 10 year rule, knowing that at the end of majority, the benefits have to be paid out to the, to the child. I mean, that doesn't seem like proper planning. It's almost like, you know, you take a little bit of a tax hit just to get the benefits of holding assets in a protected trust for the child spent. Right, right. Okay. Who's going to take us through page 15?Speaker 1:27:21Well, 15 touches on the other classes of eligible designated beneficiaries. Uh, so in, in this, in this situation you have, uh, either chronically ill or disabled beneficiary, uh, or you have a beneficiary is not more than 10 years younger in, in that case, you, uh, you can use the life expectancy rule. It's payable directly or if it's payable to a Conduent trust for one of those beneficiaries. There's one little exception. Oh, the accumulation trust, they're not on the table. You get the 10 year rule regardless, unless the accumulation trust is for the sole lifetime benefit of a disabled, we're chronically ill beneficiary, in which case you can use an accumulation trust to achieve the life expectancy rule. Otherwise, the 10 year rule is going to apply. And as with a minor child, when the minor child reaches majority on the death of one of those beneficiaries, uh, the retirement plan is now subject to the 10 year rule.Speaker 1:28:28So as an example, I leave my IRA to a disabled beneficiary. The disabled beneficiary is entitled to receive distributions based upon the life expectancy rule. What's that beneficiary dies 15 years after I die? Well, on that beneficiary is death. The retirement plan must be fully distributed within 10 years thereafter by December 31 beginning of the year thereafter of that beneficiary staff. Uh, so it gives a little bit of a respite, uh, to the 10 year rule. But the 10 year rule is still there after the death of one of those eligible designated beneficiaries. So it's doesn't give you the full lifetime benefit forever.Speaker 1:29:1416, 16, just you know, going back under prior law, as I said at the beginning, if you have a direct benefit situation, conduit trust or an accumulation trust for a non spouse beneficiary was not the Sables chronically ill, a minor child or not more than 10 years younger than the participant, uh, then or it was more than 10 years younger than the participant, then you have, uh, the 10 year rule having replaced life expectancy rule. Well there is no life expectancy rule left in that situation. Uh, which is going to affect a lot of clients who are single or who, who are maybe in a second marriage situation and don't want or, or want to leave the IRA to their children. In fact, you know, under prior law, one of the more desirable assets to leave to children and grandchildren was an IRA because of the life expectancy payoff in that you can let the tax deferral occur.Speaker 1:30:13For many years, those beneficiaries were a lot younger. That's been replaced because now we have this 10 year rule that applies, uh, with without regard to the life expectancy. So this chart that began on page eight and ends on page 16, does it pretty much cover every scenario that a planner needs to be aware of? I think so for four to 14 different scenarios that we determined that we can send this chart out in a Microsoft word format with the native format for it, if any of your participants would like it. But yeah, it covers it and tells us where to look as far as which regime is going to Oh fuck. So across the top is every potential payout and on the left hand column has every potential situation mission. Now we have a much more detailed chart that's going to be very similar to this that we should have ready probably Monday or Tuesday for anyone who, uh, is interested in it.Speaker 1:31:12But I think the really good news here is that the law is much simpler than it was in 2019. Right? I bet. I, I don't know. In a way, yes. But this idea of you know, you still have the life expectancy, you believe still have accumulation, trust and conduit trust and it's almost like you had this house very intricately designed and developed. Now we have an add on room on the side, which is 10 year rule and how it applies and how it Oh affects planning. Now let me mention one more thing and that is if the one spouse died in 2019 less than 270 days ago and the surviving spouse has not rolled over yet or has not taken it over, that surviving spouse may be able to disclaim it and then it will go to the children or trust for the children based on what the estate plan allows and then they can get a lifetime stretch because it would still be under the 2019 rules. That is correct. One one little wrinkle. If it goes to an accumulation trust, then yes, it stays under the 2019 regime indefinitely. However, if it goes to children directly, when those children die, then the 10 year rule kicks in at that point. So if the surviving spouse is old and in poor health and doesn't need the money, that surviving spouse should probably disclaim. Yes.Speaker 1:32:38Okay. I am happily surprised that we covered this in 32 minutes. Um, I think we've pretty much put all the big things in here. Now what are we going to do for our Lindberg talk, which is 90 minutes. We're just going to talk slower that we're going to get we, you know, we tried to stay above a 20,000 feet year. We're going to dive down into some nitty gritty because you know as as you know devil's in the details. Things like disabled and chronically ill have definitions that have nuances and questions and as with any new lead tax legislation, there's always the things that didn't really get up there clearly before there was enacted. So there's some rough edges they need to be sat down as people have pointed out. And I think another thing that we're going to talk about then too is you know, what provisions in your trust do you need to re look at?Speaker 1:33:27You know, there's a lot of language and trust anonymous is necessarily may not apply. Um, there were just a lot of restrictions on who could be added as a potential beneficiary, whether they be younger or older than the actual designated beneficiary of the plan. Now that stuff doesn't necessarily matter that much anymore that we have a 10 year rule. Right? I'm not having to worry about life expectancy. So we'll have a lot of sample clauses and provisions for use and trust instruments as well. Well, what occurs to me that I don't think we ever did before, but I think we'll be doing a lot of, is deciding whether the IRAs and maybe some other assets should go into a pot trust. So instead of dividing everything one third each among three children and their respective families, do you keep the IRA and some other assets out and then spray that income out to lower bracket individuals?Speaker 1:34:14Or, I'm working on a client right now who spends $200,000 a year on an autistic child. Well, that autistic child could receive those benefits and have a tax deduction of that amount. So it would be foolish to get split that IRA among high income taxpayers when that low income taxpayer who actually has medical expenses exceeding what's going to come out of the IRA can get a tax free. So I think it's going to be a lot more thinking and we're going to have to give thought to, uh, how much flexibility you can give a fiduciary. But if it's a 10 year rule, at worst, you're not worried about who the oldest beneficiary is anymore. You just, you can use any of them as a designated beneficiary and then you can have the spraying and the income out. And especially with the lower kitty tax. That's another reason that I think tax lawyers and estate planners are going to get a lot more active in the income tax planning arena because we have to. Right. Okay. Well we appreciate everybody who attended today. Um, we thank Clearwater beach for being there and we look, really would appreciate any questions, comments or suggestions that you might have on this presentation. You've got our email addresses there. Uh, please stop the panel. Send us the hardest questions you can think of. We'll be updating our materials and checking them twice. I hope you had a great new year's and May, 2020 be everything it can be. Thank you. ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download