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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, 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, Milan D. Slak, Nicholas J. Dimakos, Robert E. Donatelli, Shana Siegel, Shauna M. Deans, Taxation, Victor S. Elgort |

  • Jul 17, 2018Milan Slak to Present at PICPA’s Conference on Pennsylvania Tax

    Milan D. Slak, a Member of law firm Norris McLaughlin, P.A., will present “Pass-Through Entities and Personal Income Tax: A Focus on Numbers and People” at this year’s Conference on Pennsylvania Tax, sponsored by the Pennsylvania Institute of Public Accountants (PICPA). The event will be held three times in different locations: July 20, 8:00 a.m. – 4:00 p.m., in Cranberry; July 23, 8:00 a.m. – 4:00 p.m., in Harrisburg; and July 24, 8:00 a.m. – 4:00 p.m., in Malvern. For more information please visit: https://www.picpa.org/attend-cpe-events/conferences/picpa-conference-on-pennsylvania-taxes.

    Slak will present with Frank Tobias, Revenue Fiscal Analyst Supervisor for the Pennsylvania Department of Revenue. Together, they will cover the basics of Pennsylvania personal income tax and pass-through entities including the hot topics, letters and notices – why people get them, and reminders and administration. PICPA is made up of practitioners in public accounting, industry, government, and education.

    A licensed Certified Public Accountant, Slak focuses his practice on all areas of taxation, business law, and estate planning. He handles corporate, partnership, individual, and international taxation matters, and addresses tax issues and resolves tax disputes with the Internal Revenue Service and state governmental taxing authorities. He assists in the formation and organization of business entities, including S corporations, C corporations, limited liability companies, and partnerships, as well as the buying and selling of businesses. He works with clients to properly structure the governing documents for these entities, and he represents clients in tax controversy matters. Slak earned his B.B.A. (Accounting), from University of Toledo, and his J.D. and LL.M in Taxation from Villanova University School of Law.

    Posted in: Milan D. Slak, News, Taxation | Tags: , , , , ,

  • Apr 06, 2018Milan Slak Presents Tax Webinar to NAILBA Members

    Milan D. Slak, a Member of Norris McLaughlin, P.A., was pleased to present a tax webinar for members of The National Association of Independent Life Brokerage Agencies at 10 a.m. Friday, April 6. Slak discussed the “New Section 199A Deduction for Domestic Qualified Business Income.” This webinar was aimed to help demystify the complexity of the new tax deduction and give participants a clear understanding of how to move forward.

    “Beginning in 2018, most individuals, estates and trusts too, may deduct up to 20% of certain domestic qualified business income from limited liability companies, partnerships, S corporations, and sole proprietorships. The deduction may be limited by the business’s Form W-2 wages, depreciable property, and the taxpayer’s taxable income. Also, the deduction may also not apply to income from certain service trades or businesses, in some cases,” Slak noted. But he did indicate that there are several ways to plan to maximize the new tax deduction.

    Slak focuses his practice on all areas of taxation, business law, and estate planning. He assists in the formation and organization of business entities, including S corporations, C corporations, limited liability companies, and partnerships. He works with clients to properly structure the governing documents for these entities and to minimize income, net investment income, and self-employment taxes. Slak earned his B.B.A., from University of Toledo, and his J.D. and LL.M of Taxation from Villanova University School of Law.

    Posted in: Milan D. Slak, News, Taxation | Tags: , , , , ,

  • Nov 22, 2016Milan D. Slak to Present CPA Class

    Milan D. Slak, a Member of the law firm Norris McLaughlin, P.A., will present a one hour continuing education class on self-employment tax and LLC operating agreement provisions for the CPAs at Buckno, Lisicky & Company.  The class will be held on Tuesday, December 6.

    A resident of Allentown, Slak focuses on all areas of taxation, business law, and estate and succession planning.  As a licensed CPA, he handles corporate, partnership, and individual taxation matters, and addresses tax issues and resolves tax disputes with the Internal Revenue Service and state governmental taxing authorities.  He works closely with clients to design and advise on a variety of tax planning initiatives and transactions involving federal and state tax law; mergers and acquisitions; capital investment; corporate, limited liability company, and partnership structuring; operation, reorganization, and termination; the use and taxation of trusts; and estate and succession planning for owners of closely held businesses.

    Additionally, Slak assists in the formation and organization of business entities, including corporations, S corporations, C corporations, limited liability companies, and partnerships.  He works with clients to properly structure the governing documents for these entities and to minimize income, net investment income, and self-employment taxes.  Slak also works with clients to design and implement estate, succession, and gifting strategies to achieve personal goals and minimize taxes.

    Over the past 10 years, Slak has been a speaker at local and national conferences on topics including choice of entity, capitalization structure, tax provisions of the healthcare act, the net investment income tax, and the taxation of S corporations, limited liability companies, and partnerships.

    Slak also works with franchise owners on business, personal, succession, estate, gift, and tax minimization strategies.  He focuses on achieving client goals in a tax efficient manner.

    Slak earned his LL.M. in Taxation in 2001 and J.D. in 1995 from Villanova University School of Law, and his B.B.A. in Accounting in 1991 from the University of Toledo.

    Posted in: Milan D. Slak, News, Taxation | Tags: , , , ,

  • Nov 22, 2016Milan D. Slak Guest Speaker in October

    Milan D. Slak, a Member of the law firm Norris McLaughlin, P.A., presented a Lehigh Valley Institute for Learning in Retirement course on October 25.  The course, entitled “Headline News: The ILR Investor’s Guide to What Matters Most,” was on the topic of estate planning.

    On October 27, he presented a two hour continuing education class on tax-free corporate reorganizations for Buckno, Lisicky & Company, Certified Public Accountants.

    A resident of Allentown, Slak focuses on all areas of taxation, business law, and estate and succession planning.  As a licensed CPA, he handles corporate, partnership, and individual taxation matters, and addresses tax issues and resolves tax disputes with the Internal Revenue Service and state governmental taxing authorities.  He works closely with clients to design and advise on a variety of tax planning initiatives and transactions involving federal and state tax law; mergers and acquisitions; capital investment; corporate, limited liability company, and partnership structuring; operation, reorganization, and termination; the use and taxation of trusts; and estate and succession planning for owners of closely held businesses.

    Additionally, Slak assists in the formation and organization of business entities, including corporations, S corporations, C corporations, limited liability companies, and partnerships.  He works with clients to properly structure the governing documents for these entities and to minimize income, net investment income, and self-employment taxes.  Slak also works with clients to design and implement estate, succession, and gifting strategies to achieve personal goals and minimize taxes.

    Over the past 10 years, Slak has been a speaker at local and national conferences on topics including choice of entity, capitalization structure, tax provisions of the healthcare act, the net investment income tax, and the taxation of S corporations, limited liability companies, and partnerships.

    Slak also works with franchise owners on business, personal, succession, estate, gift, and tax minimization strategies.  He focuses on achieving client goals in a tax efficient manner.

    Slak earned his LL.M. in Taxation in 2001 and J.D. in 1995 from Villanova University School of Law, and his B.B.A. in Accounting in 1991 from the University of Toledo.

    Posted in: Milan D. Slak, News, Taxation | Tags: , , , , ,

  • Dec 14, 2015Norris McLaughlin, P.A. Welcomes New Tax and Business Law Member

    The Pennsylvania office of Norris McLaughlin, P.A., welcomes new Member Milan D. Slak to its Taxation, Business Law, Franchise Law and Estate Planning and Administration Groups.

    “We are very excited to have Milan join the firm.  His wealth of experience from working in accounting firms for the last decade, and his knowledge, not only as a lawyer, but as a recently practicing CPA, further enhances the services we can offer our clients,” said Dolores Laputka, a Member of the firm and Chair of the Pennsylvania office Business Law Group.

    “After careful consideration, I decided to leave Concannon, Miller & Co., P.C., a premier CPA firm, to transition my experience to focus directly on the legal aspects of taxation, business law, and estate planning and administration at Norris, McLaughlin & Marcus, P.A.,” Slak said.

    Slak, a resident of Allentown, focuses his practice on all areas of taxation, business law, and estate and succession planning.  He handles corporate, partnership, and individual taxation matters, as well as addressing tax issues and resolving tax disputes with the Internal Revenue Service and state governmental taxing authorities.  Slak frequently lectures at local and national conferences on topics ranging from tax provisions of the healthcare act to the net investment income tax.  He works with franchise owners on a wide variety of business, personal, succession, estate, gift, and tax minimization strategies.

    Slak earned his LL.M. in Taxation in 2001 and J.D. in 1995 from Villanova University School of Law, and his B.B.A. in Accounting in 1991 from the University of Toledo.

    Posted in: Business Law, Milan D. Slak, News, Taxation |

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