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Summary of New Estate Plan Law Changes
- The new tax law has many changes that can affect your estate plan. The exemption for 2020 increased from $11,400,000 to $11,580,000 and up to $23,160,000 for married spouses.. Please note that in 2026, the exemption will revert back to 2017 levels. The gift tax exemption remains at $15,000 per person.
- Small Estate without administration was increased from $150,000 to $166,250. See Probate Code Section 13100.
- SECURE ACT ended "STRETCH" feature in IRAs and Retirement Plans. Consult with your estate planning attorney.
Summary of Real Estate Law Changes
California was heavily impacted by the new tax law.
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SECURE ACT
President Donald Trump signed the SECURE ACT into law on December 17, 2019, and it became law on January 1, 2020. The SECURE ACT made important changes to retirement plans:
1. Effectively removed the "STRETCH" feature in IRAs and other retirement accounts. Now, non-spouse beneficiaries must withdraw the retirement benefits within 10 years after settlor passes. Consult with your estate planning attorney regarding how this change can affect your retirement when you pass.
2. RMD has been changed from 70 1/2 years of age to 72.
3. The age limit for IRA Contributions has been removed.
4. New parents maybe able to take penalty withdrawals. Consult with your tax adviser first.
5. Long-term part-tiime employees may be able to eligible for 401k plans