Final SECURE 2.0 regulations

 The IRS has finally issued its long-awaited Final Rule implementing the “SECURE 2.0” legislation governing distributions to non-spouse designated beneficiaries of IRAs, 401(k) plans, and similar retirement vehicles. Although this release affects a number of finalized regulations, one of the most important for IRA owners and their families involves the long-uncertain question of whether required minimum distributions (RMDs) will be needed during the 10-year period that applies to “non-eligible designated beneficiaries.” The IRS’s final answer is: If the owner of the account had reached his Required Beginning Date (which usually means he has started taking required distributions), then those distributions must continue during the 10-year period. If he had not, then no RMDs are needed. 

These RMDs will be based on the owner’s life expectancy, not that of the beneficary(ies), under the statutory rule that the distributions must continue “as least as rapidly” as they had been before the death of the owner. 

Recall our earlier posting advising that many non-eligible designated beneficiaries can benefit from a shortened period (six years or so) rather than trying to plan distributions over the entire 10-year period. 

Estate planning for digital assets

1Password, a tech company that sells a password storage app, has published a new guide called How to get started with digital estate planning. It covers both the person who wants to make his digital assets available after he dies and the person inheriting those assets. It also has a section covering cryptocurrency.

Over the line

 NPR describes the experiences of those who inadvertently ended up disqualifying themselves from SSI and other programs managed by the Social Security Administration, and ended up owing thousands in overpayments. 

The asset limit of $2,000 has not been updated since 1989, it reveals. 

New amendments to EPIC

Public Act 1 (2024) made a number of changes to the Estates and Protected Individuals Code (EPIC). These changes were given immediate effect as of February 21, 2024. 

Two of the most significant ones for probate practitioners: 

The expedited estate administration provision of section 3982 and the collection by affidavit (bypassing probate) provision of section 3983 have been expanded to cover estates of $50,000 or less, up from the $27,000 figure that applied in 2023. The figures will continue to be subject to annual adjustments based on cost of living. (Under section 1210, the limit for those who died between January 1 and February 23, 2014 will be the $28,000 certified by the State Treasurer in January.)  

There were several amendments to the Trust Code as well. 

One significant amendment of interest to personal injury practitioners: 

The amount that can be paid under a settlement or payment on a judgment to the parent or custodian of a minor child under section 5102 without having to appoint a conservator is increased from $5,000 per year to $50,000 per year, also annually adjusted. 

"Ghost Hacking" - a new BOLO

A relatively new way cyberthieves steal wealth is by taking over the identities of people after they die, an act known as ghosting or ghost hacking - searching for news that someone recently died, such as through online memorials and death notices, then hack into and take over his social media accounts, email accounts, etc. 

Forbes - How to Protect Your Estate and Loved Ones From Ghost Hacking

EPIC cost of living adjustments

 The state Treasurer has issued the updated cost-of-living adjustments to the several dollar amounts specified in EPIC, as follows: 

The spreadsheet that displays the historical figures is found at https://tech.906law.net 

Tax and planning - 2024

The IRS has issued Bulletin 2023-48, announcing its annual inflation adjustments for tax year 2024. We have posted an updated Tax calculator 2024 with these adjustments at the 906 LawTech site. Key points of interest for personal planning include: 

Per-person per year gift reporting exemption - $18,000 

Estate and gift tax exemption equivalent - $13,610,000 

Cap on earnings subject to FICA - $168,600