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Dealing with Proposed Regs under the SECURE Act

Steven B. Gorin, CPA, Esq., CGMA
Published Date:
Jun 1, 2022

My article, “Strategy Under the SECURE Act” (the “prior article”) ( examined certain strategic issues that CPAs may need to explain to their clients. This article complements those ideas with provisions of proposed regulations issued in February (the “proposed regs”). Please read the prior article before reading this one. As was the case with the prior article, this update paints with a broad brush to provide a strategic overview and should not be relied on by itself; instead, go look at Natalie Choate’s scholarship at For finer technical details, American College of Trust and Estate Counsel (ACTEC) comments on the proposed regs are linked here

Planning Ideas from Prior Article

The prior article recommended building significant postmortem flexibility into estate planning documents, but acknowledged uncertainty within the legal community as to how much flexibility would be acceptable. The proposed regs grant retroactive effect to any changes made to a trust before the beneficiary finalization date. They also provide that any changes made after the beneficiary finalization date can have only an unfavorable effect, but kindly provide that the effect applies only to future taxable years. Thus, whatever uncertainty the prior article admitted regarding the effectiveness of postmortem has been relegated to the dustbin.

However, this flexibility can increase the drawbacks of naming a revocable trust as the beneficiary. Any postmortem changes made to any trust created under the revocable trust agreement would affect the distribution rules that apply to all other trusts. Suppose Sally dies, and her revocable trust divides into trusts for her children, Huey, Louie, and Dewey; suppose that the rules apply to the trust agreement’s terms in a way so that each child’s share of the IRA must be distributed taking into account only the oldest child’s life expectancy. If either Huey, Louie, or Dewey amends his own trust so that a charity counts, then each person’s trust must take IRA distributions as if there were no designated beneficiary. Instead, the beneficiary designation should allocate the IRA to Sally’s children, to be held in a separate trust for each child, incorporating by reference the trust’s terms from the revocable trust agreement.

How 10-Year Rule Works

If the decedent dies before the required beginning date (RBD), then the 10-year rule works just like we thought it might: No matter what the beneficiary’s age, no distributions are required until December 31 following the 10thanniversary of the decedent’s death (the “10-year cutoff”). Thus, providing that a trust terminates and is distributed outright to someone who may be a very old beneficiary, the 10-year rule remains available. Note that this applies to all Roth IRAs, which do not have an RBD.

If the decedent dies after the RBD, the proposed regs apply a different rule.  If there is no qualified designated beneficiary, one uses the decedent’s life expectancy, which exceeds 10 years if the decedent dies on or before age 80. If the oldest designated beneficiary’s life expectancy exceeds the decedent’s, that beneficiary’s life expectancy is used, but the retirement plan must be distributed fully no later than the 10-year cutoff. Thus, if the decedent died before age 80, it may be better not to have any designated beneficiary; therefore, flexibility to disqualify a trust may help in some situations.

The proposed regs’ paradigm for death after the RBD was unexpected and has been criticized as contrary to the statute. Whether these criticisms will result in a different rule under final regulations is anyone’s guess. In case the final regulations retain the rule, ACTEC has requested relief for those who assumed the 10-year rule would apply the same as for death before the RBD.

Other Changes

The proposed regs explain more how conduit trusts work, adds an option for a trust that terminates upon age 31, and adds an option for a trust for a child with an older beneficiary.

Generally, the proposed regs also disregard unexercised powers of appointment and any other potential to modify the trust until it actually happens. Whereas I had avoided a contingent general power of appointment to save generation-skipping transfer (GST) tax, I no longer have that concern.

Steven B. Gorin, CPA, Esq., CGMA, is a partner in Thompson Coburn LLP. He is a Regent and chairs the Employee Benefits Committee of the American College of Trust & Estate Counsel and former chair of the Business Planning Group of Committees of the American Bar Association’s Real Property, Trust Estate Law Section. He is a member of the National Association of Estate Planners and Council (NAEPC) Estate Planning Hall of Fame. For more information about the author, please visit and

Views expressed in articles published in Tax Stringer are the authors' only and are not to be attributed to the publication, its editors, the NYSSCPA or FAE, or their directors, officers, or employees, unless expressly so stated. Articles contain information believed by the authors to be accurate, but the publisher, editors and authors are not engaged in redering legal, accounting or other professional services. If specific professional advice or assistance is required, the services of a competent professional should be sought.