A PRIL 2020
E AGLE A ND F EIN . COM
What Does the SECURE Act Mean for Your Retirement Planning? On Jan. 1, 2020, the SECURE Act went into effect, and it contains some of the most sweeping changes to retirement tax legislation in more than a decade. As estate planning attorneys at Eagle & Fein, P.C., we want to make sure you, as our clients, are fully informed about these important changes. Under the SECURE Act, the required beginning age for minimum distributions increased from 70 1/2 to 72 years old. The new legislation also repealed the maximum age for contributions to traditional IRAs and created an entirely new beneficiary category. For most of our clients, though, the most significant change was the elimination of the stretch IRA. Before the SECURE Act went into effect, if you inherited an IRA, you could take withdrawals, and pay the concurrent taxes on those withdrawals, over a long period of time. There was a tax incentive to use as much of that time as was available to you. After all, why rush and pay taxes when you can let an asset grow? Since the passage of the SECURE Act, nonspouse beneficiaries at the age of maturity are now required to withdraw and pay taxes on the full value of an inherited IRA within 10 years of inheritance. If your spouse is your beneficiary, nothing has changed. But if you have a nonspouse beneficiary, the tax consequences associated with the SECURE Act are significant. Depending on the age of your inheritor, there is a good chance that without proper planning, they will be forced to pay taxes on the full value of your IRA during their prime earning years. Don’t panic, though, because there are still ways to protect your legacy within this new framework. Many of our clients want to provide protection planning for their children in their estate plans. Protection planning involves creating trusts for the benefit of the client’s children that provide blended family protection and protection from unwise or influenced decisions, creditors, and divorce. Many of these types of trusts were created as “see-through conduit trusts, which necessitate that the required minimum distribution from the retirement account after death must flow through the trust rather than accumulating in it. Under the SECURE Act, these types of trusts lose the benefits of the protection planning
10 years after the death of the retirement account owner. For many, the loss of the protection planning for their retirement accounts is not what they want. Additionally, since the SECURE Act accelerates the full taxation of the retirement account to within 10 years (as opposed to the previous timeframe of the life expectancy of the beneficiary) for most nonspouse beneficiaries, many will want to explore ways to minimize the impact of the acceleration. One way you can protect your assets, and eliminate the taxation of the retirement account within 10 years of your death, is through the formation of a Charitable Remainder Unitrust (CRUT). With this type of trust, you can ensure that your beneficiary — your son, let’s say — gets distributions from the fund throughout his lifetime. However, at his passing, the remaining balance of the fund goes to a charitable organization of your choice. This could be an organization that already exists, or it could be an organization created within the family so that future generations can participate in planned giving. In this example, forming a CRUT won’t give your son more money overall, but it prevents him from being overloaded with a large sum of money all at once, which will protect him from unwise or influenced decisions and creditors. It also offers you an excellent opportunity to perpetuate your family values and teach your kids and grandkids about the importance of giving back. If you are concerned with the balance going to charity upon your son’s death, you can minimize this impact by combining the CRUT planning with life insurance planning. The life insurance would replace a portion of the value of your retirement account designated to charity on your son’s death for your grandchildren. Planning is personal, and what made sense for you when you originally made your plan may not make sense now. Given that the changes implemented by the SECURE Act are sweeping — we have really just scratched the surface in this article — now is an excellent time to review your estate plan and make sure your plan still accomplishes your goals and objectives. –Brian A. Eagle 317-726-1714 1
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READY TO TAKE UP THE NOMADIC LIFESTYLE AFTER RETIREMENT?
Here’s How to Plan for It
You’ve worked hard for years to arrive at this moment: retirement. Now that you’re free of your 9-to-5 job, you have a lot more time for activities you enjoy. That extra time is what leads many people to turn to a nomadic lifestyle after retirement. Touring in an RV, sailing around the world, or even just retiring to a cabin in a remote locale are all popular options for new retirees. If the spirit of adventure is calling you, here are some financial tips to set you on the right path.
Many have turned their experience into books or blogs, like Lynne Martin, who’s been traveling around the world with her husband, Tim, for the last three years. The Martins used the sale of their home to finance their travels. They also take cruises to cut down on travel costs and often dine in to save money.
DO YOUR RESEARCH
DOWNSIZE BEFORE YOU GO
If you have a specific place in mind for your retirement, like Hawaii or Texas, look at rental costs and other lifestyle changes that can affect your budget. For example, Hawaii’s cost of living is cheaper than other popular retirement states, like Florida, but basic commodities may be more expensive. If a boat or RV is more your style, be sure to add repair and fuel costs into your budget. As you go about researching and planning, be sure to consult with your financial advisor so they can help you look at your current situation and make adjustments. With the proper planning, you’ll be living your nomadic dream in no time.
Some folks choose to sell their home and use the income to fund their travels, staying in apartments and rentals as they go. If that seems too drastic, downsizing to a smaller home is also a good option, especially if you plan to travel in intervals but want a home base to return to. This also gives you the option of renting your home while you’re away and using the money to continue traveling.
ASK OTHER NOMADS
Crowdsource advice from friends and family members who’ve taken the leap. Lots of other people have shared your dream and made it a reality.
The Story of the Golden Marker
A POWERFUL ESTATE PLANNING LESSON
get into a car crash and you don’t survive. Now, your husband owns the marker.
golden marker? The attorney. The kids spend all of the value of the golden marker fighting over it in the courts, and nobody wins. This is an extreme example, of course, but it illustrates a sad truth. If you accomplished implementing an estate plan during your life and linked what you owned and your beneficiary designations to your plan, the golden marker would have been protected from inadvertently being passed to your husband’s second wife’s children. There is an entire area of law built around estate planning for a reason. If you aren’t planning and actively reviewing and updating your plan, the truth is that your assets may not go to whom you want, the way you want, and when you want. If you can’t remember the last time you reviewed your plan, chances are it is time for a review meeting. Give us a call at 317-726-1714 today to schedule a review meeting to assure you are still on track to protect your legacy.
He grieves you for years. He had a happy and loving marriage with you, but eventually, he has to move on. Your husband starts to date again, and he falls in love with another woman. Let’s call her Becky. Becky has her own two children from a previous marriage, and at first, your husband and Becky are careful to keep their assets separate. But eventually, they get married, and who owns what becomes increasingly blurry. After a long second marriage, your husband passes in his old age. As his spouse, Becky now owns that golden marker your parents left you. And when your children come asking for it, they discover that Becky has left the marker to her own children. Knowing that it is their rightful inheritance, your kids take Becky’s kids to court. In the end, you know who ends up with the
Imagine that your parents give you a golden marker. It has been in your family for generations, and it’s worth $1 million. Your parents gave it to you with the expectation that you will pass the marker along to your children when you die and that the marker will stay in your family for many generations to come. One day, when you’re all grown up, you meet the man of your dreams. The two of you get married, and you have two children together. But, on the way home from the grocery store one night, you
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Eagle & Fein’s Fight to End Alzheimer’s
Led by Melissa Claycomb
Beet, Goat Cheese, and Arugula Salad
Around this time two years ago, one of Eagle & Fein’s longtime advisors was diagnosed with early onset Alzheimer’s disease. This man was a huge friend to the firm and is one of the reasons we at Eagle & Fein, P.C. have been able to establish our place in the estate planning niche. So, when he was diagnosed, we knew right away that the firm would want to get involved in Alzheimer’s prevention and treatment in some way. Our client services associate, Melissa Claycomb, spearheaded our efforts, and she has done an amazing job. Melissa reached out to the Alzheimer’s Association and organized a team from Eagle & Fein, P.C. to participate in the Walk to End Alzheimer’s. In our first year, our team raised over $13,000 in just three months. We were awarded Rookie of the Year in 2018, and last year, we raised $15,000! Those funds directly support caregivers of Alzheimer’s patients and research efforts to find a cure. A lot of our success is thanks to Melissa’s hard work. Melissa is currently serving on the Walk to End Alzheimer’s planning committee, a role which she says she is glad to fill. Her work in the estate planning industry has afforded her a clear view into just how destructive Alzheimer’s disease can be, not just for people who have been diagnosed, but for their caregivers, too. “People are losing their entire retirement accounts because they’re trying to care for their loved ones,” she said. When asked about her favorite thing about the Alzheimer’s Association, Melissa says it’s that the organization has boots on the ground. They have a 24/7 help line staffed by a trained caregiver, and they connect callers with resources and offer assistance. Thank you for all you do to fight to end Alzheimer’s, Melissa!
This crowd-pleasing dish is sure to be the biggest hit at your next gathering. And it’s good for you, too!
1/4 cup balsamic vinegar
6 cups fresh arugula
3 tbsp shallots, thinly sliced 1 tbsp honey
1/2 cup walnuts, toasted and chopped 1/4 cup dried cranberries or cherries
1/3 cup extra-virgin olive oil
1/2 avocado, cubed
Salt and pepper to taste
2 oz crumbled goat cheese
6 beets, peeled and quartered
1. Heat oven to 450 F and line a baking sheet with aluminum foil. 2. In a medium bowl, combine vinegar, shallots, and honey. 3. Gradually whisk olive oil into the mixture and season with salt and pepper. 4. In a small bowl, toss the beets in dressing until they are coated. 5. Place coated beets on baking sheet and roast them for 12 minutes. Set the beets aside and allow them to cool. 6. In a large bowl, toss arugula, walnuts, and berries with the remaining vinaigrette. Season with salt and pepper. 7. Top salad with beets, avocado, and goat cheese.
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INSIDE THIS ISSUE
1 What Does the SECURE Act Mean for Your Retirement Planning? 2 How to Make the Most of a Nomadic Lifestyle After Retirement The Story of the Golden Marker 3 Eagle & Fein’s Fight to End Alzheimer’s Beet, Goat Cheese, and Arugula Salad 4 The Best Locations for Spring Blooms
SEE SPRING BLOOM
Spring is here, which means beautiful flowers are finally showing themselves after a long winter. Here are some of the best places in the U.S. to see flower blossoms and welcome the season. GREAT SMOKY MOUNTAINS The Great Smoky Mountains National Park stretches across North Carolina and Tennessee, and while its scenery is beautiful year-round, the park is especially alluring to nature enthusiasts during the spring. Through this season, miles of lady’s-slipper orchids, irises, cardinal flowers, and lilies dot its lush green landscape. It’s dubbed “Wildflower National Park” throughout this time of year, and you can experience it by car or on foot. The park also offers expert- led tours that weave through the flowers during their peak bloom. CRESTED BUTTE Crested Butte, Colorado, is best known for its winter sports and summer hikes. But recently it has drawn the attention of flower enthusiasts for its unique pink, orange, and gold alpine wildflowers that appear in the spring. This natural phenomenon even inspired the creation of the annual Wildflower
Festival in midsummer, which features nature walks, art, photography, culinary experiences, and more. For a truly unique experience, you can even ascend the town’s titular Crested Butte to spot some rare alpine sunflowers next to the picturesque West Elk Mountains. ANTELOPE VALLEY The California Poppy Reserve in Lancaster, California, is a 1,780-acre park that features sloping hills covered with fields of vibrant orange, yellow, and red poppies in the spring. Warm temperatures and heavy rainfall across Southern California during this time of year create a brief period of thick blooms as far as the eye can see. And while the poppies can be enjoyed from the comfort of your car, the best way to experience them is to walk the leisurely Antelope Loop Trail for a breathtaking, up-close adventure. Spring flora is gorgeous and naturally attracts large crowds of people every year. If you plan to visit any of these destinations, just remember that their ecosystems are delicate. Respect park signs, stay on designated trails, and do your part to make sure these flowers return year after year for future generations to enjoy.
IN THESE BEAUTIFUL LOCATIONS
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