What’s in the article:
In this article, you’ll learn how the SECURE Act 2.0 changed the rules for inherited retirement accounts, why those changes matter more for your loved ones than for you, and how outdated beneficiary designations or trust language can trigger unnecessary taxes and delays. You’ll also see why regular plan reviews and comprehensive estate planning help protect your family from stress, confusion, and avoidable financial loss.
Retirement savings often represent one of the most significant assets a family will ever pass on. Yet many people are surprised to learn that when it comes to retirement accounts, the rules aren’t set by their will or trust—they’re set by federal law.
That’s why the SECURE Act 2.0, passed in 2022, matters so much. While many people assume it only affects their retirement years, the reality is that it can significantly change how your loved ones inherit your retirement accounts and how much they’ll pay in taxes after you’re gone.
If your plan hasn’t been reviewed recently, these changes could quietly reduce the legacy you intended to leave.
Let’s walk through what changed, why it matters, and how to make sure your plan still works for the people you love.
Why the SECURE Act 2.0 Matters for Your Loved Ones
Retirement accounts don’t behave like other assets. They come with strict rules about withdrawals, timing, and taxation—and when Congress changes those rules, your family can be directly affected.
The SECURE Act 2.0 expanded on the original SECURE Act of 2019 and represents one of the most significant shifts in retirement planning in decades. According to the U.S. House Ways & Means Committee, the legislation was designed to expand retirement savings opportunities. But opportunity only exists if your estate plan is aligned with the current law.
Many older estate plans were built under rules that no longer exist. When those plans aren’t updated, families can face higher taxes, accelerated withdrawals, and unnecessary stress—at exactly the wrong time.
Key Changes You Need to Know
The SECURE Act 2.0 made dozens of updates, but a few changes have the greatest impact on families and beneficiaries.
- Required Minimum Distributions (RMDs Start Later)
The age at which you must begin taking required minimum distributions from traditional IRAs and 401(k)s has increased:
- Age 73 for those born between 1951 and 1959
- Age 75 for those born in 1960 or later
This gives your accounts more time to grow. But larger balances can also mean larger taxable withdrawals later, especially for your beneficiaries.
Why this matters:
If your plan doesn’t include tax-minimizing strategies, your heirs may inherit a larger tax bill instead of a larger benefit.
- The 10-Year Rule for Most Beneficiaries Still Applies
Most non-spouse beneficiaries must withdraw the entire inherited retirement account within 10 years. The SECURE Act 2.0 did not eliminate this rule.
That means your children or other loved ones may be forced to take larger withdrawals in a shorter period—often during their peak earning years—pushing them into higher tax brackets.
Why this matters:
A significant portion of what you saved could go to taxes simply because withdrawals are accelerated.
- How Trusts as Beneficiaries Can Backfire
Many people name a trust as the beneficiary of their retirement accounts to provide protection or control. But under current law, outdated trust language can create serious problems.
Older trusts were often written to distribute only the “required minimum amount” each year. Under today’s rules, that requirement may no longer exist—leaving trustees unable to distribute funds for years, followed by a massive, taxable distribution in year ten.
Why this matters:
Instead of steady, manageable income, your loved one could face a single, enormous tax hit—potentially losing hundreds of thousands of dollars you intended for them.
If your trust was created before 2020—or even before 2023—it may no longer work as you intended.
How These Changes Affect the People You Love Most
A pattern emerges quickly: while the SECURE Act 2.0 can benefit you during retirement, it often shifts complexity and tax burdens onto your beneficiaries.
Without proper planning, your family may face:
- Avoidable taxes
- Delays accessing funds
- Confusion about next steps
- Court involvement
- Financial strain during a time of grief
This is why estate planning isn’t just about documents. It’s about ensuring real-world clarity when your loved ones need it most.
Why Updating Your Plan Now Matters
Any time federal law changes, your estate plan should be reviewed. That’s especially true when retirement accounts—often a family’s largest asset—are involved.
Most estate plans fail not because they were poorly written, but because they were never updated.
When we work together, I help you:
- Review retirement account beneficiaries
- Identify tax traps created by the 10-year rule
- Update trust provisions
- Align every account with your goals
- Create a clear, current asset inventory
- Ensure your loved ones know exactly what to do
The SECURE Act 2.0 is a reminder that laws change—and static plans fail. A relationship-based plan evolves and works when your family needs it most.
Want to better understand how to protect your family and your legacy? Register for one of our upcoming workshops to learn more.
https://myanchorlaw.submitrequests.com/workshop-a
This article is a service of Attorney John F. Koenig, Anchor Law, Life and Legacy Planning, LLC, a Personal Family Lawyer® Firm. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a comprehensive Life & Legacy Planning Session™, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Life & Legacy Planning Session™.
The content is sourced from Personal Family Lawyer® for use by Personal Family Lawyer® Firms, a source believed to provide accurate information. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own separate from this educational material.