At a glance
- Before the SECURE Act, Hopkins says, beneficiaries could stretch retirement account distributions across their own lifetimes, with caveats; outside of spouses, heirs now have 10 years to distribute the account.
- The shorter runway, Hopkins says, means inherited IRA planning is no longer a matter of leaving the account to an heir and letting the stretch run.
- The segment covers the basics of a charitable remainder unitrust and when it might outperform a traditional inherited IRA.
Jamie Hopkins, Bryn Mawr Trust's chief wealth officer, laid out the case for and against putting an inherited IRA into a charitable remainder unitrust in an Oct. 8 video for WealthManagement.com's Trusts & Estates. He spoke with Trusts & Estates editor in chief Susan Lipp in the Talking T&E for Advisors series.
Before the SECURE Act, Hopkins says, beneficiaries could stretch retirement account distributions across their own lifetimes, with caveats; outside of spouses, heirs now have 10 years to distribute the account. Hopkins described the shift as going from 30-plus years of tax deferral to a 5-to-10-year window.
The shorter runway, Hopkins says, means inherited IRA planning is no longer a matter of leaving the account to an heir and letting the stretch run. Advisors now have to look at trusts, charities, beneficiary selection and other arrangements, he said.
The segment covers the basics of a charitable remainder unitrust and when it might outperform a traditional inherited IRA. It also asks how a CRUT can restore tax deferral for inherited IRA assets and what factors advisors should weigh before building one into an IRA estate plan.
A CRUT carries a charitable remainder by definition, so deferral is not the only term. Hopkins says whether the trade-off works depends on the family, the heirs and the charitable intent already in the plan.
Reported by the Tax & estate planning desk from WealthManagement.com. Published . Corrections