Estate planning laws have changes, especially when it comes to the beloved "stretch" IRA.

With a stretch IRA, those inheriting IRAs could take "required minimum distributions" over their lifetimes.

Before January 1, 2020, stretch IRAs were a significant estate planning tool.

That is the date the "Setting Every Community Up for Retirement (or SECURE) Act" became law.

Not surprisingly, how to address estate planning for an IRA is all the talk among full-time estate planning attorneys, financial advisors, and accountants.

A recent Financial Advisor titled “Navigating The New Estate Planning Realities” took up this timely topic.

So, what are some of your alternatives with the demise of the stretch IRA?

Here are a few options being discussed in the estate planning community.

Different strategies must be applied when estate planning laws change.

Take larger IRA distributions.

By taking these distributions and reinvesting them in a Roth IRA count or other assets, these could receive a step-up in bases when you die.

The goals is to take-penalty withdraws while simultaneously lowering your tax rate.

Pay the IRA portion of the estate to beneficiaries in a lower tax bracket.

What does this do?

The IRA portion would trigger higher taxes on higher earning beneficiaries.

Leaving assets with a step-up in basis would be better for these high-income beneficiaries.

For example, if you want to benefit both children and grandchildren, then leave the assets that will enjoy a step-up in basis at your death (i.e., eliminating capital gains taxes up to the date of your death value) to your children in higher tax brackets and the IRA among your grandchildren in lower tax brackets.

This approach may be a more a tax-efficient plan to transfer more after-tax wealth within your family.

Withdrawal funds early and purchase life insurance or long-term care insurance.

If you choose not to withdrawal all IRA funds early, you should withdrawal only the RMD or account growth portions.

This could freeze the current value of the IRA.

If the withdrawals push your income into the next higher tax bracket, this does not work.

The amounts left after taxes can be placed in an income-tax free life insurance policy.

Pay IRA benefits to an income tax-exempt charitable remained trust.

To do this, you need to designate a charitable remained trust as the beneficiary to your IRA proceeds.

The principal of the trust is inaccessible unless it has been paid to the human beneficiaries according to the designated schedule.

No situation is exactly the the same.

The best way to adjust to meet estate planning law changes like the SECURE Act is to work with an experienced estate planning attorney.

Reference: Financial Advisor (Feb. 11, 2020) “Navigating The New Estate Planning Realities,”