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The Testamentary Charitable Remainder Unitrust

What's the SECURE Act?

Setting Every Community Up for Retirement Enhancement Act, commonly known as the SECURE Act. Most changes based on the new law take effect January 1, 2020, but some won't be in place for another year or more.

The SIX most important things to know about the SECURE Act:

  • If you turn 70½ in 2020 or later, you can stay invested in your Individual Retirement Accounts (IRAs) or defined contribution plan (DC) account longer because the age for required minimum distributions (RMDs) is now 72.
  • You can continue to contribute to IRAs, regardless of age, if you're still working and receiving earned income.
  • If you inherit money from an IRA or 401(k) plan (from someone other than a spouse), you'll have to withdraw the full amount within 10 years.
  • Starting in 2024, you can start saving in a 401(k) plan if you're a long-term, part-time employee.
  • You can withdraw up to $5,000 from an IRA, penalty-free, to cover childbirth or adoption expenses. You may be able to do the same from a retirement plan.
  • You can withdraw up to $10,000 from 529 plans to repay student loans for a beneficiary.

A solution to the Secure Act and Beneficiary Inheritance Planning

Are you planning to leave your IRA to your children and other heirs using a stretch IRA plan?

If so, consider the benefits of using a testamentary charitable remainder unitrust to replace your obsolete stretch IRA plan.

  • Spreads out the income payments over the lifetime of your heirs
  • Provides income tax saving to the heirs
  • Allows tax-free growth inside the trust
  • Protect heirs
  • Results in no taxes being paid on the IRA when it is distributed to the trust
  • Leaves significant charitable gifts to support our cause

For more information about a testamentary charitable remainder unitrust, or about how the SECURE Act may affect you, please call Megann O'Malley, Director of Planned Giving at (802) 485-2282 or email at [email protected]

The subject matter in this communication is educational only and provided with the understanding that Norwich is not rendering legal, accounting, investment or tax advice. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, investment or accounting obligations and requirements.