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  • Feb 05, 2020The Secure Act and Its Impact on Your Estate Plan

    As the festivities of the New Year have waned and we approach Tax Season, we bring you news of a recent legislative development that warrants your attention and may require changes to your estate plan. During the final weeks of 2019, Congress enacted federal tax legislation known as the “SECURE Act.”

    The SECURE Act

    The law makes important changes to the federal tax code that will impact distributions from retirement accounts such as 401(k)s, 403(bs)s, IRAs, and tax-qualified annuities (referred to in this legal advisory collectively as “Retirement Accounts”). Those changes may affect you during your lifetime and may also affect the way Retirement Accounts are distributed to your beneficiaries after your death. Consequently, the law may also limit your ability to protect retirement accounts from your beneficiaries’ creditors in a tax-efficient manner.

    This legal advisory summarizes the key aspects of the SECURE Act, which is effective as of January 1, 2020, that may affect your estate plan. We hope you find it helpful in understanding certain major changes enacted by this legislation and how they might affect you. However, bear in mind that the law will affect everyone differently. Therefore, we strongly urge you to contact our office to arrange a time for us to discuss this new law in detail, so that we may act to make any necessary revisions to your estate plan as soon as possible.

    Changes Affecting You

    One component of the SECURE Act that will affect many people during their lives is a change in the age at which a person must begin taking distributions from a Retirement Account. Prior to the SECURE Act, most people (except those who were not yet retired) were required to begin taking distributions from Retirement Accounts by April 1st of the year following the year in which they reached age 70 ½. Under the SECURE Act, the age is increased to 72 for those who were not yet required to take distributions under the old law.

    Also, the SECURE Act removes the age cap for funding traditional (non-Roth) IRAs, meaning that qualifying individuals over age 70½ are now eligible to make deductible and nondeductible contributions to a traditional IRA (and may, in some instances, present additional opportunities for funding a Roth IRA).

    These changes involve additional detail and nuance beyond the summary provided in this Alert and may present an opportunity for some to take further advantage of the tax-deferred savings offered by Retirement Accounts. Feel free to reach out to any member of the Norris McLaughlin Trust, Estate, and Individual Tax Law Practice Group to discuss those opportunities in coordination with your accountant or financial advisor.

    Changes Affecting Your Beneficiaries

    Perhaps the most significant changes concerning estate planning brought about by the SECURE Act regard how Retirement Accounts are distributed after the account holder’s death to avoid penalties while continuing to defer taxes. Under prior law, it was possible to “stretch” the distribution of inherited Retirement Accounts over the life expectancy of a beneficiary. Beneficiaries were required to take a required minimum distribution each year based on their life expectancy and the undistributed balance of the Retirement Account could continue to grow income tax-free. Better yet, leaving the balance of a Retirement Account to a trust, properly drafted to meet IRS requirement, for the benefit of a beneficiary, could protect retirement benefits from the beneficiary’s creditors and ensure that those benefits remain in the family upon the beneficiary’s death, while still benefiting from income tax-free growth for the undistributed portion of the Retirement Account.

    The SECURE Act has changed those rules so that most beneficiaries will be required to receive the full amount of an inherited Retirement Account within 10 years of the death of the person who funded the Retirement Account. Certain beneficiaries, including your spouse; your minor children (but not grandchildren); and beneficiaries who are disabled, chronically ill, or no more than 10 years younger than you, are exempt from the 10-year rule and are still permitted to take distributions over their expected lifetimes (although, children who are minors at the time of inheritance must now take the full distribution within 10 years of reaching the age of majority). However, Retirement Accounts left to those beneficiaries in trust might not qualify for the life expectancy payout, depending on the terms of the trust. Even special needs trusts might require review, as they must be structured narrowly to ensure that the stretch is preserved. Provisions that allow the trust to benefit another individual might be problematic.

    The good news is that the SECURE Act does not change the method of designating your beneficiaries to receive Retirement Accounts. If you have existing beneficiary designations in place, those designations are still valid. However, the SECURE Act does introduce a host of new considerations that must be taken into account when structuring your estate plan to maximize the benefit of Retirement Accounts and best protect your beneficiaries.

    Unfortunately, Congress gave us little warning that these changes were imminent. Accordingly, estate plans that previously offered a sound approach to planning for Retirement Accounts may no longer provide a good solution.  For example, some of you may have plans in place that leave Retirement Accounts to a trust known as a “Conduit Trust.” All distributions from Retirement Accounts paid to a Conduit Trust must be distributed directly from the Trust to the beneficiary. That might have been a good approach under the old law since distributions could be stretched over the expected lifetime of the trust beneficiary. However, under the SECURE Act, that same Conduit Trust might now require distribution of the entire Retirement Account to the beneficiary within 10 years of the death of the account owner or upon a minor child reaching the age of majority. Depending on the circumstances, under the SECURE Act, other planning techniques might better serve the goals those plans are meant to achieve.

    Take Action

    With the implementation of the SECURE Act effective January 1st of this year, we recommend that we review your estate plan as soon as possible to ensure that it disposes of your Retirement Accounts in keeping with your objectives.  We welcome the opportunity to discuss these changes with you, answer any questions you may have, and make recommendations specifically for you. Please contact our office to arrange a meeting or phone conference at your earliest convenience so that we can help you find the best planning solutions to meet your needs and those of your family.

    Note:  The contents of this letter are for informational purposes only and are not intended to constitute legal advice or form an attorney-client relationship. For information and advice particular to your situation, please contact one of the following attorneys in our Trust, Estate & Individual Tax Practice Group:  A. Nichole Cipriani, James J. Costello, Jr., Shauna M. Deans, Nicholas J. Dimakos, Robert E. Donatelli, Victor S. Elgort, Michelle M. Forsell, Hon. Emil Giordano (Ret.), Christopher R. Gray, Judith A. Harris, Abbey M. Horwitz, Dolores A. Laputka, Jill Lebowitz, Kenneth D. Meskin, Michael T. Reilly, Shana Siegel, Milan D. Slak, Burt Allen Solomon.

    Posted in: A. Nichole Cipriani, Abbey M. Horwitz, Burt Allen Solomon, Christopher R. Gray, Dolores A. Laputka, Estate Planning & Administration, Hon. Emil Giordano (Ret.), James J. Costello, Jill Lebowitz, Judith A. Harris, Kenneth D. Meskin, Michael T. Reilly, Michelle M. Forsell, Milan D. Slak, Nicholas J. Dimakos, Robert E. Donatelli, Shana Siegel, Shauna M. Deans, Taxation, Victor S. Elgort |

  • Nov 01, 2017Judith Harris Presents to LVHN Physicians

    Judith A. Harris, a Member with Norris McLaughlin, P.A., recently participated in the fourth and final of Lehigh Valley Health Network’s (LVHN) 2017 financial, estate, and tax planning seminars to physicians at its Cedar Crest and Muhlenberg Campuses.  This year’s presentations are part of a multi-year effort of the LVHN Office of Philanthropy to make such planning seminars available to its physicians and other employee groups of LVHN.

    Harris’ panel presentation focused on estate and tax planning, as well as asset protection strategies for physicians and their families.  The presentation, entitled “Financial Grand Rounds: Comprehensive Planning for Physicians,” also included Robert H. Brown, CLU©, ChFC©, AEP©,  a financial planner and the proprietor of Lehigh Valley Investment Group, Retirement and Income Specialists, and was introduced and led by Dr. John Jaffe, of Physician Integration Strategies LLC, who is former Executive Medical Director of the Lehigh Valley Physician Organization.

    Jane Wrisley, the Vice President of the LVHN Office of Philanthropy, believes the Financial Grand Round presentations are a service to physicians.  Wrisley observed, “They work so hard for our patients, we want to provide a convenient opportunity for them to attend an educational forum.”

    Harris has over 30 years of experience in the areas of wills and trusts, estate planning, estate administration, and taxation.  In addition to creating estate plans from the most basic to the most sophisticated wills, revocable trusts, powers of attorney, and living wills, Harris’s areas of practice include business matters involving corporations, partnerships, and limited liability companies and planning for business succession.  Harris’s practice also includes charitable trusts and foundations; and representation of estates, trusts, and beneficiaries in disputes before the Orphans’ Court.  She routinely handles the resolution of tax controversies for businesses and individual taxpayers before various divisions (Civil, Criminal, and Collection) of the Internal Revenue Service, and the Pennsylvania Department of Revenue.  These cases often involve the resolution of estate, business, and individual audits; or collection efforts such as liens, levies, and garnishments by the IRS and state taxing authorities.  In her work as an estate planning attorney, Harris frequently structures the optimal transfer of a client’s wealth and business interests to younger generations in order to minimize tax consequences.  Harris earned her LL.M. in Taxation from Villanova University School of Law in 1991, her J.D. from American University in 1986, and her A.B., cum laude, from Bryn Mawr College in 1983.

    Posted in: Estate Planning & Administration, Judith A. Harris, News | Tags: , , , , , , ,

  • Oct 10, 2016Judith A. Harris to Serve as President of the Board of Pennsylvania Shakespeare Festival

    Judith A. Harris, a member of Norris McLaughlin, P.A.,   has been elected to serve as President of the Board of the Pennsylvania Shakespeare Festival (PSF) for the fiscal year commencing October 2016.  The PSF, a professional company in residence at DeSales University, is the Official Shakespeare Festival of the Commonwealth and a professional, not-for-profit Theatre Company.

    PSF enjoys an emerging national reputation for excellence. Each summer, PSF produces a season of Shakespeare and other classics, musical theatre, and children’s theatre. PSF is summer home to many artists from around the country, including winners and nominees of the Tony, Obie, Emmy, Drama Desk, Outer Critics Circle, Jefferson, and Barrymore awards. The Festival celebrates its 25th anniversary season this year and honors the memory of its founder, Father J. Schubert, O.S.F.S.

    Harris has over 29 years of experience in the areas of wills and trusts, estate planning, estate administration, and taxation.  In addition to creating estate plans from the most basic to the most sophisticated wills, revocable trusts, powers of attorney, and living wills, Harris’s areas of practice include business matters involving corporations, partnerships, and limited liability companies and planning for business succession.  Harris’s practice also includes charitable trusts and foundations; and representation of estates, trusts, and beneficiaries in disputes before the Orphans’ Court.  She routinely handles the resolution of tax controversies for businesses and individual taxpayers before various divisions (Civil, Criminal, and Collection) of the Internal Revenue Service, and the Pennsylvania Department of Revenue.  These cases often involve the resolution of estate, business, and individual audits; or collection efforts such as liens, levies, and garnishments by the IRS and state taxing authorities.  In her work as an estate planning attorney, Harris frequently structures the optimal transfer of a client’s wealth and business interests to younger generations in order to minimize tax consequences.  Harris earned her LL.M. in Taxation from Villanova University School of Law in 1991, her J.D. from American University in 1986, and her A.B., cum laude, from Bryn Mawr College in 1983.

    Posted in: Judith A. Harris, News | Tags: ,

  • Nov 11, 2015Norris McLaughlin, P.A.Attorney Featured on WDIY Lehigh Valley Community Public Radio

    Judith A. Harris, Member of Norris McLaughlin, P.A., P.A., was featured as a guest on Laurie A. Siebert’s weekly program, “Your Financial Choices.” The segment, entitled “Estate Planning Basics,” aired on WDIY Lehigh Valley Community Public Radio during National Estate Planning Awareness Week (October 19-25). Harris is a returning guest to the show, having previously discussed matters including wills, trusts, estates and tax planning strategies on Ms. Siebert’s program in 2009, 2010, 2012, 2014, and earlier this year.

    “As a current member and Past President of the Estate Planning Council of the Lehigh Valley, part of our mission is to enhance estate planning awareness amongst the community. I was delighted to do this by discussing estate planning basics to the WDIY listening audience, and to answer their excellent questions,” said Harris.

    Harris has over 29 years of experience in the areas of wills and trusts, estate planning, estate administration, and taxation.  In addition to creating estate plans from the most basic to the most sophisticated wills, revocable trusts, powers of attorney, and living wills, Harris’s areas of practice include business matters involving corporations, partnerships, and limited liability companies and planning for business succession.  Harris’s practice also includes charitable trusts and foundations; and representation of estates, trusts, and beneficiaries in disputes before the Orphans’ Court.  She routinely handles the resolution of tax controversies for businesses and individual taxpayers before various divisions (Civil, Criminal, and Collection) of the Internal Revenue Service, and the Pennsylvania Department of Revenue.  These cases often involve the resolution of estate, business, and individual audits; or collection efforts such as liens, levies, and garnishments by the IRS and state taxing authorities.  In her work as an estate planning attorney, Harris frequently structures the optimal transfer of a client’s wealth and business interests to younger generations in order to minimize tax consequences.  Harris earned her LL.M. in Taxation from Villanova University School of Law in 1991, her J.D. from American University in 1986, and her A.B., cum laude, from Bryn Mawr College in 1983.

    Posted in: Estate Planning & Administration, Judith A. Harris, News |

  • May 20, 2015Judith A. Harris Honored by Lehigh Valley Business as one of 25 Women of Influence

    Judith A. Harris, Member of Norris McLaughlin, P.A., has been honored as one of 25 Women of Influence by Lehigh Valley Business. The awards ceremony was held on May 19 at Cedar Crest College.

    “I am honored to be named among these esteemed leaders who are influential to their companies, industries and our community,” said Harris.

    Harris has over 28 years of experience in the areas of wills and trusts, estate planning, estate administration, and taxation.  In addition to creating estate plans from the most basic to the most sophisticated wills, revocable trusts, powers of attorney, and living wills, Harris’s areas of practice include business matters involving corporations, partnerships, and limited liability companies and planning for business succession.  Harris’s practice also includes charitable trusts and foundations; and representation of estates, trusts, and beneficiaries in disputes before the Orphans’ Court.  She routinely handles the resolution of tax controversies for businesses and individual taxpayers before various divisions (Civil, Criminal, and Collection) of the Internal Revenue Service, and the Pennsylvania Department of Revenue.  These cases often involve the resolution of estate, business, and individual audits; or collection efforts such as liens, levies, and garnishments by the IRS and state taxing authorities.  In her work as an estate planning attorney, Harris frequently structures the optimal transfer of a client’s wealth and business interests to younger generations in order to minimize tax consequences.  Harris earned her LL.M. in Taxation from Villanova University School of Law in 1991, her J.D. from Washington College of Law of The American University in 1986, and her A.B., cum laude, from Bryn Mawr College in 1983.

    Posted in: Judith A. Harris, News |

  • Feb 12, 2015Norris McLaughlin, P.A.Attorney Featured on Radio Call-In Show

    Allentown, PA (February 12, 2015) – Judith A. Harris, Member of Norris McLaughlin, P.A., was featured as a guest on Laurie A. Siebert’s weekly program, “Your Financial Choices.” The segment, entitled “Recent Changes to the Power of Attorney Statute and What it Means to You,” aired on WDIY Lehigh Valley Community Public Radio on February 4, 2015. Harris is a returning guest to the show, having previously discussed matters including wills, trusts, estates and tax planning strategies on Ms. Siebert’s program in 2009, 2010, 2012, and again in 2014.

    “The new Pennsylvania Power of Attorney law imposes significant and detailed changes which should concern every Pennsylvania resident, as well as every person appointed to serve as agent for a Pennsylvania resident. I was delighted to present these changes to the WDIY listening audience, and to answer their excellent questions,” said Harris.

    Harris has over 28 years of experience in the areas of wills and trusts, estate planning, estate administration, and taxation.  In addition to creating estate plans from the most basic to the most sophisticated wills, revocable trusts, powers of attorney, and living wills, Harris’s areas of practice include business matters involving corporations, partnerships, and limited liability companies and planning for business succession.  Harris’s practice also includes charitable trusts and foundations; and representation of estates, trusts, and beneficiaries in disputes before the Orphans’ Court.  She routinely handles the resolution of tax controversies for businesses and individual taxpayers before various divisions (Civil, Criminal, and Collection) of the Internal Revenue Service, and the Pennsylvania Department of Revenue.  These cases often involve the resolution of estate, business, and individual audits; or collection efforts such as liens, levies, and garnishments by the IRS and state taxing authorities.  In her work as an estate planning attorney, Harris frequently structures the optimal transfer of a client’s wealth and business interests to younger generations in order to minimize tax consequences.  Harris earned her LL.M. in Taxation from Villanova University School of Law in 1991, her J.D. from American University in 1986, and her A.B., cum laude, from Bryn Mawr College in 1983.

    Posted in: Estate Planning & Administration, Judith A. Harris, News |

  • Feb 27, 2013Judith A. Harris Recognized as Honorary Co-Chair

    February 26, 2013

    Norris McLaughlin, P.A.
    721 Route 202/206, Suite 200
    PO. Box 5933
    Bridgewater, NJ 08807-5933
    Contact: Edward C. Miller, Jr.
    Chief Marketing Officer
    (908) 722-0700, X-4224
    ecmillerjr@nmmlaw.com

     
    Judith A. Harris Recognized as Honorary Co-Chair

    Allentown, PA (February 27, 2013) – Judith A. Harris, a Member of Norris McLaughlin, P.A., was recognized by the Allentown Symphony Association as 2013 Honorary Co-Chair with Dr. Jack Mydlo for One Enchanted Evening, the Symphony’s 63rd Annual Ball held at Lehigh Country Club on February 2, 2013.

    “Much to my delight, I have attended Allentown Symphony concerts in Miller Symphony Hall since the age of six years old and have enjoyed my activities as a Board Member of the Allentown Symphony Association since 1993.  What a surprise to be recognized by the Symphony in this way. How fortunate we are to have this jewel in the crown of LehighValley arts and music,” said Harris.

    Harris has over 26 years of experience in the areas of wills and trusts, estate planning, estate administration, and taxation.  In addition to creating estate plans from the most basic to the most sophisticated wills, revocable trusts, powers of attorney, and living wills, Harris’s specialties include business matters involving corporations, partnerships, and limited liability companies and planning for business succession.  Harris’s practice also includes charitable trusts and foundations; and representation of estates, trusts, and beneficiaries in disputes before the Orphans’ Court.  She routinely handles the resolution of tax controversies for business and individual taxpayers before all divisions (civil and criminal) of the Internal Revenue Service and the Pennsylvania Department of Revenue.  These cases often involve the resolution of estate, business, and individual audits; or collection efforts such as liens, levies, and garnishments by the IRS and state taxing authorities.  In her work as an estate planning attorney, Harris frequently structures the optimal transfer of a client’s wealth and business interests to younger generations with minimal tax consequences.  Harris earned her LL.M. in Taxation from Villanova University School of Law in 1991, her J.D. from American University in 1986, and her A.B., cum laude, from Bryn Mawr College in 1983.

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    Posted in: Judith A. Harris, News |

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