finance

“Make your wishes known, especially now during COVID-19 . . . “

Let’s show love for our families, respect for our hospital workers and compassion for ourselves and make our end of life wishes known in advance . . .

While we are social distancing in our homes, it’s time to have that conversation that most of us have avoided or didn’t even know we needed to have. Make an end-of-life plan, write it down, and have it available to discuss with your doctor. Even better, reach out to a lawyer and learn how to make your wishes legally sound so if there is any kind of dispute between family members, there will be a clear path forward.

The legal document that can help to diminish the uncertainty and anguish around these decisions is called the Advanced Healthcare Directive or just Advanced Directive, and it is a standard document prepared by your attorney in the estate planning process.

Give me a call and let’s do a Zoom meeting to prepare you for a meeting with your estate planning attorney, and if you need to choose an attorney, we can help you locate one that will meet your needs as well. Let’s take advantage of the COVID-19 crisis to stop postponing our trust and estate planning and spare our families a ton of heartache and expense later on.

One doctor recently reported, “In my COVID-19 unit, patients have ranged from age 18 to 103. It’s doubtful the 18-year-old had thought much about her mortality prior to this.” Let’s at least do the Advanced Healthcare Directive and do it for our families, as well as ourselves.

finance

SECURE ACT says Goodbye, to the “stretch” IRA

The Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act) significantly changed the rules for IRAs, and defined contribution plans (such as 401(k) and profit-sharing plans). Consult with your estate attorney and tax professional about how the SECURE Act might affect you. Talk to us at Stonehouse about creative solutions available to you to deal with these and other provisions of the SECURE Act, so that you can still accomplish your legacy goals.

Goodbye “stretch” IRA !

This is one of the most significant estate planning changes of the SECURE Act. For account owners who die after Dec. 31, 2019, beneficiaries may no longer spread or “stretch” IRA distributions over their lifetimes. Instead, IRAs (Roth included), must be distributed by Dec. 31 of the 10th year following the account holder’s death. Subject to new limitations, there are exceptions to the 10-year force out:

1. Surviving spouses generally have the same options as before (spousal rollover, etc.)
2. Beneficiaries who are less than 10 years younger than the IRA owner (for example, a sibling beneficiary) may continue to a use a lifetime distribution method.
3. Disabled or chronically ill beneficiaries may take distributions based on life expectancy.
4. Minor children (but not grandchildren) may delay the 10-year period until reaching the age of majority (varies by state).

During the 10-year period, there is no required minimum distribution (RMD). For example, a beneficiary could leave the entire amount in the inherited account until the end of the 10th year. The beneficiary would then take a lump sum distribution of the entire account. Alternatively, a beneficiary could spread distributions evenly over 10 years – or any combination as long at the 10-year deadline is satisfied.

Income tax impact

The 10-year force out is included in the revenue section of the Act. The message is clear: The force out is intended to generate revenue for the federal government more quickly (10 years at most). The compressed income could push beneficiaries into higher tax brackets creating a tax “double whammy” (compressed income taxed at a higher marginal rate).

IRA owners and beneficiaries should work closely with tax advisors to determine the distribution pattern that makes the most sense. In some cases, a 10-year distribution pattern to prevent bracket creep may be advantageous. In others, a lump sum distribution may be appropriate (for example, taxpayers with significant tax deductions).

Call me at Stonehouse, for more information about the SECURE Act.  I will help you identify issues and strategies to address them, so we can decide with your estate planning attorney and tax professional what strategies you should be considering.

finance

The COVID-19 pandemic has left our community dealing with a level of uncertainty we’ve never experienced before. As we and our business owner clients navigate this crisis together, we will continue to honor the trust placed in us to deliver the caring, education & service levels you expect. You can be confident that we and the mutual life insurance companies we work with are open for business and here to meet your needs, whether you are looking for stability & security for your family, key person coverage for valued employees, disability insurance protection for your income, or expedited underwriting of life insurance to help you secure an SBA loan . . . we are here to help.

Follow this space in the coming weeks for innovative ideas and tips on how your business and family can come through this challenging period stronger than ever before.