Planning for the future is an essential part of life, especially when you have loved ones to look after. By creating an estate plan, you can make sure that the people you care about are well taken care of long after you have passed away. In these times, it is more important than ever to protect your family, as well as your assets. As you begin the estate planning process, here are a few things you should consider.
Traditional IRA Distribution Laws have changed
Since the Setting Every Community Up for Retirement Enhancement (SECURE) Act was passed in 2019, there is a 10-year window for traditional IRA distributions to non-disabled, nonspouse beneficiaries. In other words, if you are leaving your traditional IRA to someone more than 10 years younger than you, you can no longer spread those distributions over 50 or 60 years. The age for taking required minimum distributions has increased from 70.5 to 72, meaning that those younger than 72 can convert a voluntary distribution to a Roth IRA.
Use annual gift exemption before the end of the year
Under the annual federal gift tax exclusion, you can give up to $15,000 to anyone, but the amount you give away will not be counted against your $11.58 million lifetime exemption. After this year, the $15,000 could be increased due to inflation.
Trusts can help manage your assets
There are many different types of trusts, and each has their own benefits. Some possibilities include:
- Irrevocable trusts
- Revocable trusts
- Bypass trusts
- Domestic asset protection trusts
- Special-needs trusts
It can be difficult to understand estate planning laws and figure out what works best for you and your family. An estate planning attorney can help you with everything, whether it is creating your initial plan or modifying your plan for changes that may occur throughout your lifetime.