For many Orlando residents, an  estate plan  is a comprehensive tool they use to make sure their loved ones benefit well after they have died. This security we provide makes us feel good and nurtures a want to be financially responsible. But for some of you, you may soon feel like you are being punished for financial responsibility and care for your loved ones.

The newly signed Setting Every Community Up for Retirement Enhancement Act (Secure Act) could negatively affect non-spousal beneficiaries of any retirement plans or individual retirement accounts (IRAs) you may have. These plans are set up both for our own financial security when we retire and for the beneficiaries of these plans should we died before the account is drained of its funding. Many of us intentionally do not use the funds in these accounts for tax reasons but only take out the required minimum distribution (RMD) annually.

So, how could the Secure Act impact beneficiaries who inherit your IRAs? Here, we provide an overview.

Prior to the Secure Act taking effect on January 1, 2020, beneficiaries were required to only withdraw a certain portion of funds related to their life expectancy rate. So, the younger, you were at the time of inheriting the IRA, the longer you could withdraw accounts. This is known as stretching RMDs over a lifetime. The benefit was two-fold: (1) you were able to save money on taxes; and (2) you were able to earn money on the funds in the account.

Now, the law requires that any IRA account inherited by a person other than a spouse of the deceased to be drained within ten years and the account to be subsequently closed. This is a stark change from the previous method. Though the new rule is meant to increase tax revenue for the country, it will, in effect, harm those who plan ahead for their loved ones.

As mentioned, the 10-year rule does not apply to spouses who are named the beneficiary of an IRA. In addition, for anyone who inherited an IRA before the effective date of January 1, 2020, this new rule will not apply.

The rule will also not apply to:

The Secure Act, however, isn’t filled with all bad news. The good news is this:

These two changes may indirectly benefit any heirs to an IRA.

If you have individual retirement accounts or retirement plans, it is time to revisit them. You may want to  check with an estate planning attorney  in Orlando to make sure your goals for your beneficiaries are still the objective of the plan. Keep in mind, too, that from time to time, laws may again change, so consistent review and update of an estate plan are essential to making sure you leave your loved ones what you intended to leave them in Florida.