Have you seen the headlines about the “Build Back Better Act”? You may need to pay closer attention to your estate planning and retirement accounts in the near future. Although the bill hasn’t passed yet, the proposed tax law changes could impact your exposure to estate planning taxes and your self-directed IRA investment options. Here are some of the tax law changes that are on the table and what they could mean for your estate plan and investments.
Proposed Tax Law Changes to IRA’s
- Prohibiting the use of IRA funds for investments that require accredited investor status or aren’t widely available to the public.
- Prohibiting the use of IRA funds for investments where the IRA owner has more than a 10% interest in the investment or where the IRA owner is an officer.
- Contribution limits on IRAs in excess of $10M for those earning $400k-$450k per year.
- IRAs with an account balance of $10-$20 million would have increased minimum distributions.
- Closes the “back-door” Roth IRA by eliminating conversions of all after-tax IRA and after-tax employer plan contributions.
- Eliminates pre tax conversions and rollovers to Roth from non-Roth accounts for those making $400–$450k.
More changes may be on the horizon before the bill is passed, but it’s important to keep in mind that these new changes may become law soon. It’s never too early to take a closer look at your retirement accounts and estate planning options to make sure you have the most tax efficient strategies. Staying proactive will help to keep your wealth in the right hands.
If you need guidance on what to do with your estate plan, contact us. We can help you update an existing plan or create a new one. We offer free consultations so there is no risk to seeing if we are the right fit for you.
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Disclaimer: This article is intended to serve as a general summary of the issues outlined therein. While this article may include general guidance, it is not intended as, nor is a substitute for, qualified legal advice. Your review or receipt of this article by Lexern Law Offices, Ltd. (the “LLG”) or any of its attorneys does not create an attorney-client relationship between you and the LLG. The opinions expressed in this article are those of the authors of the article and does not reflect the opinion of the LLG.