Got Retirement Savings? Must Read: How the SECURE Act 2.0 Impacts Your Estate Plan

If you have retirement savings, this is something you can’t afford to ignore.

The SECURE Act 2.0 brought some of the most significant changes to retirement planning in decades. While many people assume these updates only affect how they save for retirement, the reality is much bigger. The law directly impacts how your loved ones inherit your retirement accounts, how quickly they must withdraw the money, and how much they’ll lose to taxes if your plan isn’t updated.

Without proper planning, these changes can quietly shrink the legacy you worked your entire life to build.

In this article, we’ll break down what the SECURE Act 2.0 changed, how it affects your beneficiaries, the most common mistakes families make, and why SECURE Act 2.0 estate planning is now essential—not optional.

Why the SECURE Act 2.0 Matters for Your Loved Ones

Retirement accounts don’t work like other assets. IRAs, 401(k)s, and similar accounts come with strict tax rules, required timelines, and distribution requirements. When Congress changes those rules, your estate plan must change too.

Passed in 2022, the SECURE Act 2.0 expanded on the original SECURE Act of 2019 and introduced new rules around required minimum distributions, beneficiary withdrawals, and how trusts interact with retirement accounts. According to the U.S. House Ways & Means Committee, this legislation represents one of the most significant shifts in retirement policy in over 15 years.

That’s good news—if your plan keeps up.

But if your estate plan was created before 2020—or even a few years ago—it may no longer work the way you think it does.

Key SECURE Act 2.0 Changes You Need to Know

1. Required Minimum Distributions (RMDs Start Later)

The age for required minimum distributions has increased:

• Age 73 for those born between 1951–1959

• Age 75 for those born in 1960 or later

This gives your retirement accounts more time to grow. However, larger balances later in life can create larger taxable withdrawals for your beneficiaries.

Why this matters: More money isn’t always better if it leads to higher taxes for your loved ones. Without tax planning strategies, your beneficiaries could face major tax bills at the worst possible time.

2. The 10-Year Rule Still Applies for Most Beneficiaries

The SECURE Act 2.0 did not eliminate the 10-year rule.

Most non-spouse beneficiaries must still empty inherited retirement accounts within 10 years. That often means accelerated withdrawals that push heirs into higher tax brackets.

Why this matters:Your child or loved one could lose a significant portion of their inheritance simply because the money must come out faster—and be taxed higher—than expected.

3. Trusts and Retirement Accounts Can Create Hidden Tax Traps

Many people name trusts as beneficiaries of retirement accounts to create control or protection. Unfortunately, under the SECURE Act and SECURE Act 2.0, outdated trust language can backfire.

Older trusts may:

• Force large taxable distributions

• Prevent access to funds when beneficiaries need them

• Trigger massive tax bills in year ten

  
  

Real-world example: Many trusts created before 2020 were designed to distribute only the “required minimum amount” each year. But under the new law, there may be no required annual amount. The result? The trustee can’t distribute funds for nine years—then must empty the entire account in year ten, triggering a huge tax bill all at once.

Instead of steady support, your loved one inherits a tax disaster.

Why Comprehensive Estate Planning Works Where the Law Creates Complexity

Traditional estate planning often stops once documents are signed. Comprehensive planning goes further by including:

• A complete, updated asset inventory

• Ongoing plan reviews

• Beneficiary coordination across all accounts

• A trusted advisor your family can turn to

• Guidance for loved ones after you’re gone

  
  

The SECURE Act 2.0 is a reminder that laws change—but your responsibility to protect your family remains. A static plan fails. A living, relationship-based plan protects the people you love when it matters most.

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This article is a service of The Ambitious Legacy Firm. We do not 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 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 using the link below to schedule a call with our Client Services Director, who will be able to guide you on scheduling your Legacy Planning Session.

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