Tag: IRA

CARES act IRA distribution

The CARES and SECURE Acts—Implications for Estate Planning

In March of 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act made its way through Congress and was signed into law by President Trump.

Even though the vast majority of this new legislation is committed to financially helping small businesses weather the Coronavirus pandemic storm, there are some inclusions that impact a much broader population. In specific, the CARES Act includes some changes to the way the government views certain investment accounts—IRAs, in particular.

In this article, the legal team at Kokish and Goldmanis, PC is exploring the implications that the recently passed CARES Act has in the realm of family law and estate planning. After reading this, you’ll have a better idea of where you may sit financially in light of this new legislation.

For Individual Taxpayers

Let’s talk a bit about how individual US taxpayers are directly affected by the passage of the CARES Act.

Here are the biggest takeaways:

  • For the entirety of 2020 (deadline: December 31st), all US taxpayers who have been affected by the Coronavirus pandemic will be allowed to receive up to $100,000 in qualified distributions from retirement savings accounts without having to pay the traditional 10% early distribution penalty. Furthermore, for a three-year period following the distribution, the individual can re-contribute these funds to a qualified retirement account without having to worry about yearly maximums.
  • Some tax deferments are being offered for those who choose to amortize their tax liability for the early retirement distribution income they claim for the next three years.
  • Required Minimum Distribution (RMD) rules for IRAs and other retirement plans have been completely suspended for the entirety of 2020.


Often mentioned alongside the CARES Act, the SECURE Act became law on December 20th, 2019. This act sought to make it easier for small business owners to arrange for ‘safe harbor’ retirement options that come with less administrative overhead. However, as with the CARES Act, there were other, broader impacts as well.

Prior to the SECURE Act becoming law, distributions from an IRA to a beneficiary could be ‘stretched’ out over the entirety of the beneficiary’s lifetime. Now, IRA payments to beneficiaries are restricted to a 10-year window. This new payout period significantly reduces the potential for invested funds to gain value over the life of the beneficiary, as they can no longer be left to accrue interest for an indefinite period of time.

This has heirs understandably concerned. What might have been considered a $500,000 payout over a lifetime might now only be considered a $350,000 payout over a 10-year period. Granting this, estate planning firms around the country are busier than ever, as they’ve had to retool clients strategies for planning their estates.

secure act inherited IRA

Charitable Giving Changes

For those looking to capitalize on charitable giving during the 2020 calendar year, the CARES Act includes a universal tax deduction of $300 per individual. This deduction applies even for taxpayers who take the ‘standard’ deduction when filing for 2020. Unless new legislation is passed to modify the existing law, this tax deduction is expected to stay in place beyond 2020.

Another charitable giving change for 2020 has to do with how much of your Adjusted Gross Income (AGI) you can use for monetary charitable gifts and still receive a tax deduction for doing so. Up to the passage of the CARES Act, the limit was 60% of your AGI. Now, you can donate as much as 100% of your Adjusted Gross Income and deduct all of that giving on your taxes.

It’s important to remember that these new charitable giving changes apply only to donations that are made in the form of cash given to qualified charities. To find a prequalified, IRS-vetted charitable organization you can give to in 2020 to maximize your gift, you can view this page.

When You Have Estate Planning Questions, We Have Answers

Kokish and Goldmanis, PC is dedicated to providing reliable, trustworthy estate planning services for our clients.

As much as the world continues to change in light of world events or governmental legislation, we will be here to help make sense of our ever-changing family law landscape. It’s easy to get frustrated and confused with how rapidly the laws change; this is why we are here as a resource for you.

To learn more about how we can help with an estate planning or other family law-related matter, contact our offices to schedule a consultation.

We look forward to working with you.