In this week's Arista Advice, Paul L. Moffat of Arista Wealth Management discusses the recent new changes to the SECURE Act and what they may mean for you.
Hello, welcome to this week’s Arista Advice. Hope you’re well and having a great day.
With the SECURE Act there are many changes. A lot of positive wonderful changes, but there’s also some awareness and some changes that we need to be aware of. Did you know that there’s now three types of classifications of beneficiaries on your IRA that the government has imposed? Let’s quickly talk about those three types of beneficiaries.
The first is an EDB, an eligible designated beneficiary. They all still get the stretch provision found in the IRS tax table that’s based upon the life expectancy. They are your surviving spouse, a minor child, a disabled individual, a chronically ill individual, and an individual that’s no more than 10 years younger than the IRA owner.
The second beneficiary is non-eligible designated beneficiary. An NEDB is an individual who does not qualify as EDB, an older child, grandchildren, and also some see-through look-through trusts and pass through trusts if they have that important language that needs to exist for it to be a pass-through trust. Those trusts then can become an NEDB.
The third and final is a non-designated beneficiary. These are estates. These are charities, non-qualified trusts, universities, hospitals, colleges, churches, many other 501(c)(3) institutions.
Hope this information is helpful. Don’t feel complexed. Please give us a call. We’d be happy to talk to you with you about these three new changes.
Have a great week, and we’ll talk to you soon.