Many people work hard for decades to build their retirement savings. What most don’t realize is that recent changes in the law can significantly affect what happens to that money after they’re gone – and how much of it their loved ones actually get to keep.
As an estate planning attorney, I’ve seen families unintentionally lose a large portion of an inheritance simply because their plan was never updated. The SECURE Act 2.0 made some of the biggest retirement planning changes in years, and while the updates were designed to help retirees, they can create real problems for beneficiaries if planning isn’t aligned with the new rules.
This article explains, in plain English, what changed, why it matters, and what you can do now to protect the people you love.
Why Retirement Accounts Need Special Planning
Retirement accounts like IRAs and 401(k)s don’t work the same way as bank accounts or real estate. They come with strict tax rules about when money must be withdrawn and who pays the taxes. When those rules change, the impact can be immediate – especially for your beneficiaries.
The SECURE Act 2.0 updated earlier retirement laws and changed how long your loved ones have to withdraw inherited retirement funds and how those withdrawals are taxed. If your estate plan was created even a few years ago, it may no longer work the way you expect.
Without proper planning, your family could face:
- Higher taxes than necessary
- Forced withdrawals at the worst possible time
- Delays in accessing funds
- Confusion during an already emotional period
Key Changes You Should Know About
Required Minimum Distributions Start Later
The age at which you must begin taking withdrawals from traditional retirement accounts has increased:
- Age 73 for many current retirees
- Age 75 for younger generations
While this allows your money to grow longer, it can also mean larger account balances later – which may result in bigger tax bills for your beneficiaries if no tax strategy is in place.
Most Beneficiaries Still Must Empty Accounts Within 10 Years
For most non-spouse beneficiaries, inherited retirement accounts must be fully withdrawn within 10 years of your death. This rule did not go away.
That means your children or other loved ones may be forced to take large withdrawals in a short period of time, pushing them into higher tax brackets and reducing what you intended to leave behind.
Older Trusts May No Longer Work as Intended
Many people name a trust as the beneficiary of their retirement accounts to create structure or protection. Unfortunately, trusts created before recent law changes may now cause serious problems.
Outdated trust language can:
- Delay access to funds
- Force large, one-time taxable withdrawals
- Increase taxes dramatically
- Tie a trustee’s hands when flexibility is needed most
In some cases, families discover too late that the trust they relied on actually caused more harm than good.
How These Changes Affect Your Loved Ones
While the law may offer advantages during your lifetime, it often shifts the tax burden to the next generation. Without updated planning, your loved ones could inherit confusion, stress, and unnecessary financial loss instead of security.
This is why estate planning is not just about documents. It’s about making sure everything works together – your retirement accounts, beneficiary designations, trusts, and overall plan – so your family knows exactly what to do and isn’t left figuring things out alone.
Why Updating Your Plan Now Matters
When retirement laws change, your estate plan must change with them. A plan created even a few years ago may no longer protect your family the way you intended.
When I work with clients, we:
- Review retirement accounts and beneficiary designations
- Identify tax risks created by the 10-year rule
- Update trust language when necessary
- Create a clear, current inventory of all assets
- Make sure loved ones know where everything is and what to do
The goal is clarity, not confusion – and peace of mind, not surprises.
Comprehensive Planning Makes the Difference
Traditional estate planning often ends once documents are signed. Comprehensive Life & Legacy Planning is different. It includes:
- Ongoing plan reviews as laws and life change
- Coordination of retirement accounts with your overall plan
- Guidance for your loved ones when they need it most
- A trusted advisor who already knows your family and wishes
This approach keeps families out of court, reduces conflict, and minimizes avoidable taxes.
Your Next Step
The SECURE Act 2.0 is a reminder that laws change – and plans that aren’t reviewed eventually fail. If you want to make sure your retirement savings truly benefit the people you love, now is the time to review your plan.
A Life & Legacy Planning® Session is the best place to start. Together, we’ll make sure your retirement accounts, estate plan, and wishes are fully aligned – so your family is protected when it matters most.
Your loved ones deserve certainty, not surprises.
At Cheever Law, APC, 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, starting with a valuable and educational Life & Legacy Planning Session. The Life & Legacy Planning Session will allow you to get more financially organized and make the best choices for the people you love. If you have already completed your estate plan, we will review that plan at your Life & Legacy Planning Session to ensure that it will work the way you intend and address any holes or gaps that may be present if circumstances have changed since you executed your plan.
To learn more about our one-of-a-kind systems and services, contact us or schedule a 15-minute introductory call today.