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  1. Hello lawyers! You've probably heard by now that a new law went into affect on Jan. 1, 2020, impacting retirement accounts, called the SECURE Act. You may or may not know the details, what to do about it, how much you need to know, and what you need to share with your clients about it. I've put together two scripts for our Personal Family Lawyer and Family Business Lawyer members to use to educate their communities about the SECURE Act, and the potential impacts and opportunities. Those scripts are available for your review (and use) here. As you'll see, there are two sets of considerations, and this should simplify your analysis significantly, if you think about it this way: 1. How to handle the retirement accounts during life; and 2. What to do with remaining benefits at death. The decision about how to handle accounts during life is made by the client and their financial advisor (or, you, if you are also their financial advisor), based on income tax considerations now and at retirement, as well as available funds now and income needs at retirement. Ideally, you will be working with your client and their financial advisor to consider options, but unless you are the financial advisor, you do not need to do the mathematical calculations, as that would be up to the financial advisor to do. Your job is to primarily support with options related to what happens to the remaining benefits at death. This does require you to understand the amount of assets that are anticipated to remain in the retirement account at the time of death (based on the lifetime planning considerations), and to explore with the clients how they want those assets to pass to their heirs. Here's the questions you'll want answered in that exploration: 1. Who should receive the remaining benefits? Based on who the client wants to receive the assets, you can then identify how long of a period the assets can be distributed over, based on the SECURE Act. If it's only ten years ... then you would ask the client the next question 2. If the beneficiary receives all of the assets outright over ten years, and the retirement assets are then not protected from creditors, lawsuits or future divorce, is that okay with the client? If not, you can explore having the required distributions pass to an "accumulation" trust for the benefit of the beneficiaries, so the Trustee can hold the assets over a longer time period. This could cause more adverse income tax consequences due to compressed trust tax rates, and therefore could merit exploration of using a charitable remainder trust, or perhaps converting the account to a ROTH IRA during life, and paying the tax during the lifetime of the client, rather than after their death, at potentially higher trust tax rates. If you are a Member-in-Training (meaning that you've enrolled in one of our Bootcamps, but are not yet a Personal Family Lawyer or Family Business Lawyer), conduct this analysis and read these scripts from the perspective of gaining your own understanding of the basics of the SECURE Act, and how it will impact your own retirement accounts and that of your two practice clients. If you have parents or other senior family members who have significant retirement accounts, you can also look at how the SECURE Act will apply to them. Please ask lots of questions here and on coaching calls to clarify your understanding. If you are a Personal Family Lawyer or Family Business Lawyer, make sure that you not only understand the impact of the SECURE Act on yourself, and family, but that you are prepared to educate your prospect, client and referral source community (using the scripts I've written, and the articles that will come out this week as well), and then discuss the impact with your clients when they come in for a FWPS or Estate Plan Review/Checkup. If you are a Wealth Counsel member, I understand that they have offered a training on the SECURE Act. If you are not a Wealth Counsel member or want more training than what Wealth Counsel has provided, you may want to enroll in one or more of these trainings by Bob Keebler. I am working on getting a 25% discount code on these trainings, so indicate in the comments if you'd like us to tag you when I have that discount code available. Bob also has a package of PPT presentations that are very detailed (and I imagine fairly complex) if you want to do more in depth training for your community around the SECURE Act. This probably only makes sense if you provide financial advisory services, in your office. Otherwise, you can let the financial advisors you work with help their clients understand the income tax consequences and choices of what to do with their retirement account during life, and you can remain focused on what they want to happen with whatever is left at death. Remember, your job is to counsel your clients, and they are counting on you to know about this new law, and for help understanding how it will impact them. Please let us know how else we can help you to be a better counselor to your clients. Alexis
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