With the introduction of the Setting Every Community Up For Retirement Enhancement (SECURE) Act in effect as of January 1, 2020, new and big changes have been made that affect one large aspect of retirement accounts: the payout process for beneficiaries. Previously, those who inherited someone’s retirement account were able to spread withdrawals from the account over the course of their lifetime. However, under the SECURE Act, beneficiaries are now required to withdraw all funds from an account within a 10 year period.
With the COVID-19 pandemic at large and death rates continuing to rise, the US now has more known cases than both China and Italy. During this current crisis, it’s best to remain calm and use this “stay well at home” time to do things you’ve been putting off. One such thing that may be worth considering during this unprecedented situation is setting up an estate plan.
The legendary rivalry between superstars Prince and Michael Jackson apparently extends beyond the grave in terms of whose estate is more difficult to navigate. While Michael Jackson had a valid will when he died, controversy surrounded the appointment of an executor, and there remains an ongoing battle between the Jackson family and government agencies regarding the actual value of the estate. Meanwhile, Prince, notoriously shrewd in business and control of his art and image, didn’t even leave a will. Having died unmarried with no children (despite the numerous claims of a variety of pretenders to his throne), his statutory heirs comprise of siblings and half-siblings, and up to half of his estate will be paid to state and federal tax agencies. Of course, the federal government and state of Minnesota are claiming the Purple One’s holdings are worth much more than the heirs claim, meaning his tax bill will be greater as well. Moreover, the famous vault of unreleased material might double the value of his estate. Had Prince done some basic estate planning, he could have selected specific beneficiaries and avoid probate altogether.