On December 19, 2019, Congress passed the SECURE Act — the most significant change to retirement-account rules in over a decade. The law took effect January 1, 2020, and it materially altered how retirement accounts pass at death and how older account holders must take distributions during life.

Two changes matter most to estate planners and the families they advise.

1. The end of the lifetime stretch IRA (for most beneficiaries).

Before the SECURE Act, a non-spouse beneficiary — typically an adult child — who inherited an IRA could “stretch” required distributions over their own lifetime. A 50-year-old child who inherited a $1 million IRA could take small required minimum distributions for thirty-plus years, letting the bulk of the IRA continue to grow tax-deferred. This was one of the most powerful tools in middle-class wealth transfer.

The SECURE Act largely killed it. Most non-spouse beneficiaries now have to drain inherited IRAs within 10 years of the original owner’s death. The acceleration concentrates taxable distributions into a much shorter window — often during the beneficiary’s peak earning years — pushing them into higher brackets and shrinking the after-tax inheritance materially.

There are exceptions. Spouses can still roll an inherited IRA into their own and follow normal rules. Minor children can stretch until they reach majority, then a 10-year clock starts. Disabled or chronically ill beneficiaries, and beneficiaries less than 10 years younger than the decedent, can still stretch over their own lives. But for the typical case — an adult child inheriting from a parent — the stretch is gone.

2. RMD age moved from 70½ to 72.

The SECURE Act pushed the start of required minimum distributions from age 70½ to age 72. (A later law, SECURE 2.0, has since pushed it further — to 73 today, eventually 75.) For people who don’t need their RMDs to live on, this is a small, welcome window of additional tax deferral.

How this changes the planning calculus.

If you have a substantial IRA, 401(k), or other tax-deferred account, the SECURE Act has likely changed the right beneficiary structure for it. A handful of patterns we revisit:

  • Existing “conduit” trusts named as beneficiary. A conduit trust requires that all RMDs be paid out to the beneficiary as received. Under the old stretch rules, that meant a small annual stream to a child for decades. Under the SECURE Act’s 10-year rule, it can mean the entire IRA dumped on the child in year 10 — sometimes a young adult, sometimes a beneficiary with creditor or addiction issues. Most conduit trusts drafted before 2020 should be revisited.
  • “Accumulation” trusts. Accumulation trusts can hold distributions inside the trust rather than dumping them on the beneficiary. Tax-inefficient at trust rates, but sometimes the right answer for a beneficiary who shouldn’t receive a lump sum.
  • Roth conversions. Converting a traditional IRA to a Roth, paying tax now, and leaving heirs a tax-free Roth (still subject to the 10-year drain, but tax-free) has become more attractive for some clients.
  • Charitable remainder trusts. A CRT can recreate something close to the old stretch — a stream of payments to a beneficiary over years, with the remainder to charity — for clients who are charitably inclined.

None of these is the right answer for everyone. The point is that beneficiary designations and trust structures drafted under the old regime should not be assumed to still work the way they were intended.

What to do.

If you have:

  • A retirement account naming a trust as beneficiary — have it reviewed.
  • An estate plan drafted before 2020 that talks about “stretch” provisions — have it reviewed.
  • An IRA over $1M and adult children as beneficiaries — have it reviewed.
  • A charitable inclination and a large IRA — ask about CRT structures.

This is an area where small drafting changes have outsized tax consequences.

Quick FAQ.

Does the 10-year rule apply to my spouse? No. Spouses can roll the inherited IRA into their own account and follow normal rules.

What if I named my children as beneficiaries directly, not through a trust? They’ll be subject to the 10-year rule, but at least they have flexibility on the timing within those 10 years. A trust beneficiary may have less flexibility, depending on how the trust is drafted.

Do I have to change anything? Not necessarily. Sometimes the existing structure still works. But you can’t know without a review — and a plan drafted in 2018 was drafted in a different world.

Has the law changed since SECURE? Yes. SECURE 2.0 (December 2022) tweaked several rules, including pushing the RMD age higher. The 10-year rule for non-spouse beneficiaries is unchanged. Schedule a review if your last estate plan update predates these changes.