Do you know anyone who passed away from 2015 – 2019 and left their IRA to non-designated beneficiaries? If so, those beneficiaries were subject to the 5 year rule.
A part of the new CARES act affects those distributions as well. Generally this only applies to non-designated beneficiaries who inherited before the deceased IRA owner reached his required beginning date (April 1st following the age 70 ½ year). These beneficiaries may have inherited through a will or were a beneficiary of a trust that did not qualify as a designated beneficiary. Under the just passed act these beneficiaries now have one more year. The 5-year rule will now become the 6-year rule.
It would be prudent for you to check your clients to see if you have any clients in this situation and alert them of this development. They may choose to spread out the distributions or simply not take a distribution this year. It is worth it to explain to them their options and choices.
I am an Ed Slott Master Elite trained IRA Specialist and I would like to help you. If you have any questions regarding this article or would like to schedule a complimentary consultation please call my office at 845-627-8300. My Client Service Coordinator Christina will be happy to set up a convenient time so I can help.Warm Regards,
Beth Blecker CEO
Eastern Planning Inc.
Follow Beth Blecker on Twitter: @EasternPlanning
“Ed Slott’s Elite IRA Advisor Group” is solely an indication that the financial advisor has attended training provided by Ed Slott and Company. Ed Slott is not affiliated with Royal Alliance Associates, Inc. Securities and advisory services offered through Royal Alliance Associates, Inc. Member FINRA/SIPC. Additional advisory and financial planning offered through Affiliated Advisors, Inc. Insurance services offered through Eastern Planning Inc. Listed entities not affiliated with Royal Alliance.