Why the SECURE Act 2.0 Matters for Your Loved Ones

Before diving into the details, it is important to understand that retirement accounts work differently from other assets. These accounts come with strict rules about taxes, timing, and withdrawals. When Congress updates those rules, your family’s inheritance can change significantly, sometimes for the better, and sometimes with surprising consequences.

The SECURE Act 2.0, passed in 2022, made several major updates to the original SECURE Act of 2019. Many of these changes shift who benefits from your retirement accounts and how quickly your beneficiaries must withdraw the money. According to the House Ways & Means Committee, this legislation represents “the most significant expansion of retirement savings opportunities in more than 15 years.”

Opportunity only exists if your planning is aligned with the law. That is where families often get tripped up, especially when older estate plans were built under rules that no longer exist.

Failing to update your plan could result in higher taxes for your beneficiaries, faster depletion of retirement accounts, and confusion that makes a difficult time even harder.

Key Changes You Need to Know

The SECURE Act 2.0 made dozens of updates, but the following are the ones that most directly affect your life and your loved ones.

Required Minimum Distributions (RMDs) Start Later

The age at which you must start withdrawing money from your traditional IRA or 401(k) has increased. It now moves in phases:

• Age 73 for people born between 1951 and 1959

• Age 75 for people born in 1960 or later

  
  

This gives you more time for your investments to grow before withdrawals are required. However, delaying RMDs may also mean larger account balances later, which could create larger withdrawals and bigger tax bills for your heirs unless your plan accounts for it.

Why this matters: A larger account means larger taxable withdrawals for your beneficiaries. If your plan does not include tax-minimizing strategies, they could face unnecessary tax burdens at the worst possible time.

The 10-Year Rule for Most Beneficiaries Still Applies

Under the original SECURE Act, most beneficiaries who inherit a retirement account must empty it within 10 years, with a few exceptions. The SECURE Act 2.0 did not remove that rule.

This means if your child or another loved one inherits your IRA or 401(k), they may need to accelerate withdrawals, pushing them into higher tax brackets. The IRS confirms that beneficiaries who are not eligible designated beneficiaries must follow the 10-year withdrawal rule.

Why this matters: Your child could lose a significant percentage of what you hoped to leave them because withdrawals are forced faster and therefore taxed higher than expected.

Changes Affecting Trusts as Retirement Account Beneficiaries

Many people name a trust as the beneficiary of their retirement accounts, often thinking it creates control or protection. But under the SECURE Act and SECURE Act 2.0, this can backfire if the trust language was not updated.

Old trust provisions may unintentionally:

• Force immediate taxation

• Prevent your beneficiaries from accessing needed funds

• Require distributions that conflict with your intentions

  
  

Because tax rules surrounding trusts and retirement accounts are complex, outdated planning is now one of the leading causes of accidental tax consequences for families.

Why this matters: If your trust was created before 2020, or even before 2023, it may no longer work as intended. Your loved ones may inherit a tax problem instead of a gift.

Real example: Many trusts created before 2020 were set up to pass along retirement money slowly, a little each year based on IRS rules. The new law eliminated those yearly requirements for most people. If your trust says it can only distribute the required amount each year, and there is no required amount anymore, your trustee cannot touch the money for nine years. In year ten, the entire account must be emptied. Instead of receiving manageable amounts, your child could face a massive tax bill all at once, potentially losing hundreds of thousands of dollars you worked a lifetime to save.

How These Changes Affect the People You Love Most

While the SECURE Act 2.0 provides benefits during retirement, it often creates new responsibilities and tax burdens for your beneficiaries. Comprehensive estate planning is not just about documents. It is about ensuring real-world clarity for the people you love.

Even small missteps can leave your family:

• Stuck in court

• Paying avoidable taxes

• Unsure how to access accounts

• Facing delays that create financial strain

  
  

At the time they need support most, they could be forced to figure everything out alone, unless you have a comprehensive plan and a trusted advisor who already knows your family, your assets, and your wishes.

The Importance of Updating Your Plan Now

Whenever federal law changes, your estate plan must evolve with it. This is especially true for retirement accounts because they often represent a significant portion of a family's wealth.

Most traditional estate plans fail because they are never updated. The SECURE Act 2.0 made this even more important. A plan created even a few years ago may not work today.

When we work together, we

help you:

• Review your retirement account beneficiaries

• Identify tax traps created by the 10-year rule

• Update your trust provisions

• Align every account with your goals

• Create a complete and current asset inventory

• Make sure your loved ones know exactly what to do when something happens

  
  

You do not have to guess whether your plan will work. You can know.

Why Comprehensive Estate Planning Solves the Problems the SECURE Act Created

Unlike traditional planning, which usually ends with a signed document, a comprehensive plan includes:

• A complete, updated inventory of your assets

• Beneficiary coordination across all accounts

• Regular reviews every three years

• A trusted advisor your family can turn to when something happens

• Support for your loved ones after your death, so they are not left overwhelmed

  
  

These protections keep your family out of court, out of conflict, and out of avoidable tax trouble.

The SECURE Act 2.0 is a reminder that laws change. When they do, your plan must change with them. A static plan fails. A relationship-based plan works when your loved ones need it most.

How To Learn More

If you want to make sure the SECURE Act 2.0 does not create unnecessary financial or emotional stress for your loved ones, the best place to begin is a Life & Legacy Planning Session. During this session, you will get clear on what you have, how the law affects your family, and what steps will ensure everything works exactly as you intend.

Your family deserves certainty, not surprises.

If you're ready to begin, the simplest first step is scheduling a complimentary 15-minute Discovery Call by clicking here.