Paul L. Caron

Thursday, February 2, 2023

Kaplan: The Declining Appeal Of Inherited Retirement Accounts

Richard L. Kaplan (Illinois; Google Scholar), The Declining Appeal of Inherited Retirement Accounts, 42 Va. Tax Rev. __ (2023): 

Virginia Tax Review (2021)As retirement accounts proliferate and grow in value, American retirees are increasingly leaving substantial balances in these accounts to their adult children, siblings, and other relatives. Until recently, these new owners were able to withdraw funds from these tax-favored accounts over their lifetimes as their personal circumstances dictated. 

But legislation enacted in late 2019 and regulations issued in February 2022 have sharply limited the flexibility that non-spousal beneficiaries now have regarding these assets.  This article examines those changes, analyzes their impact on the new owners of inherited retirement accounts, and considers what planning strategies are now appropriate.

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