Estate Planning for IRAs and Qualified Plans: Trusts as Beneficiaries, Impact of SECURE 2.0, CRTs

IRAs have always been an excellent vehicle for taxpayers to save for future retirement and sometimes save taxes in a current year. Many taxpayers have accumulated substantial balances in these accounts. Estate planning to minimize taxes paid on these distributions is essential.

Recent changes have curtailed taxpayers' ability to report inherited IRAs over their life expectancy and often require the account be liquidated and taxes paid within 10 years of the decedent's death. SECURE 2.0 opens new opportunities for a "back-door" stretch-out or pseudo stretch-out. Back door opportunities relate to use of CRT for QCDs and as a designated beneficiary of a qualified account, and also for use of life insurance with an ILIT structured to replicate something like the old stretch-out rules.

Using a trust as a beneficiary of an IRA can still be a viable planning opportunity. There are, however, caveats to consider. For example, naming a trustee who resides in a high-income tax state may result in paying higher income taxes on distributions than may be required. Existing arrangements need a fresh look considering SECURE 2.0.

IRA conversions and rollovers often save tax dollars and administrative burdens. Roth conversions could help mitigate the effects of SECURE 2.0. Rolling 401(k) monies into an IRA often makes sense, but there are special considerations for employer-owned stocks. Trust and estate advisers working with taxpayers holding IRAs must understand how to properly plan to mitigate taxes on these valuable investments.

Listen as our panel of estate planning experts explains how to properly plan for IRAs and IRA distributions and new considerations after SECURE 2.0.

1. Estate planning and IRAs
2. SECURE 2.0's impact on estate plans
3. Naming beneficiaries
4. Trusts as beneficiaries after SECURE 2.0
5. Charitable remainder trusts
6. Roth conversions
7. State tax considerations
8. IRA planning strategies

The panel will cover these and other critical issues:

• The impact of SECURE 2.0 on estate planning for qualified plans
• Caveats and considerations when utilizing trusts as IRA beneficiaries
• How a Roth conversion might mitigate tax consequences of SECURE 2.0
• State tax considerations for IRA beneficiary trusts

Learning Objectives

After completing this course, you will be able to:

• Identify how charitable remainder trusts can be used in estate planning before and after SECURE 2.0
• Determine state tax implications for certain IRA heirs
• Decide how SECURE 2.0 impacts IRA beneficiaries
• Ascertain when a trust as an IRA beneficiary could be a valuable planning tool
• Recognize certain caveats of IRA beneficiaries

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite: Three years+ business or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of estate, gift and trust taxation including various trusts types, the unified credit, and portability.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).