The SECURE Act 2.0 created two new exceptions to the early distribution excise tax for domestic abuse and financial emergencies. While ‘better than nothing’ neither provides much in the way of financial relief.

The SECURE Act 2.0 permits the use of some retirement plan assets to pay for long term care premiums.

New, favorable, rules apply when an excess contribution is made to an IRA, or there is a failure to take a required minimum distribution (RMD).

Identifying the trust beneficiaries who must be counted to determine the correct required minimum distribution (RMD) from a retirement account made payable to a trust is a real challenge.

The Proposed Regulations under the SECURE Act contain roughly 10 separate ‘rules’ to identify when an individual named in a trust is disregarded for purposes of determining the identity of all trust beneficiaries, which in turn controls the required minimum distribution that the trustee must take when a retirement account is made payable to the trust on the account owner’s death.

Take-Away: Previously covered in the past has been the IRS’s unique interpretation of the at least as rapidly rule when it comes to distributions from an inherited IRA when the IRA owner was over their required beginning date (RBD) at the time of their death. A couple of other ‘surprise’ interpretations also appear in those SECURE Act Proposed Regulations with regard to a designated beneficiary who is not more than 10 years younger than the deceased account owner. Again, they create a risk that a beneficiary will fail to take their full required minimum distribution (RMD) leading to a 50% excise tax imposed on the amount that should have been taken from the inherited IRA.

The world of charitable giving is changing with inflation, rising interest rates, and changes in charitable giving trends. The amount of charitable giving may fall off due to a decrease in the donor’s available discretionary income caused by inflation. Moreover, the form of the charitable gift may change to reflect what works ‘better’ in a period of high(er) interest rates. But other trends or scheduled ‘events’ may encourage more individuals to give to charity.

I was recently asked to summarize the high points in my December’s Briefing with regard to the impact of increasing interest rates on estate planning strategies. In other words, the person who asked for the summary did not want to read the 22 page handout that I prepared, which is a reasonable request considering how busy people are at the end of a calendar year (and how tedious reading that outline not doubt will be.) Accordingly, what follows are some broad generalizations that reflect how an increasing interest rate environment can impact basic estate planning that is discussed with individuals who are planning their estates.

The SECURE Act 2.0 is to become the law before the end of 2022. The focal point of this legislation is to enable more individuals to save for their retirement, while encouraging more to save through Roth retirement accounts. Not lost, though, is the reality that the more individuals save for their retirement using Roth accounts, the more tax revenues Congress currently generates.