Retirement Accounts, Trusts, and the SECURE Act: Strategic Approaches to Distribution & Planning

Salvatore J. LaMendola | Giarmarco, Mullins & Horton, P.C.

Salvatore J. LaMendola, Esq. has been a member of the Trusts and Estates Practice Group at Giarmarco, Mullins & Horton, P.C. since 1996. Sal received his J.D. from the Notre Dame Law School and holds a B.B.A. from the University of Notre Dame. His main practice areas are general estate planning; amending irrevocable trusts through trust decanting, exercises of power of appointment, and other techniques; pre-death and post-death planning for IRAs and other retirement plans; and charitable planning with charitable remainder trusts, charitable lead trusts, and private foundations. Sal is a member of the Probate & Estate Planning Section of the State Bar of Michigan. He is also a regular continuing education presenter for legal education webinar providers Rossdale of Miami, FL and Strafford of Dallas, TX. He also serves on Strafford’s Estate Planning Advisory Board and on the Interactive Legal Practice Advisory Board.

I. Retirement Account Structures & Distribution Essentials | 1:00pm – 2:00pm

• Defined contribution plans vs. defined benefit plans
  • Differences, advantages, and risks (401(k)s, IRAs, pensions, etc.)
  • How they affect retirement planning
• Required Minimum Distributions (RMDs)
  • When must distributions begin?
  • Roth IRA & Roth 401(k) exclusions
• Trusts as beneficiaries of retirement accounts
  • Trusts’ role for asset protection, special needs planning, and estate planning
  • Pros/cons of naming a trust as a beneficiary
• Why the SECURE Act changed RMDs for many retirements accounts
• Qualified vs. non-qualified beneficiaries and their tax responsibilities
• Options for RMDs to minimize tax consequences

Break | 2:00pm – 2:10pm

II. Conduit Trusts: Rules, structure, and use | 2:10pm – 3:10pm

• Definition & purpose: A trust that distributes all RMDs and retirement proceeds directly to the trust’s beneficiary as they are withdrawn
• Key features of conduit trusts
  • They always qualify as “see-through trusts”
  • Secure tax advantages depending on the beneficiary’s situation
• Challenges Post-SECURE Act
  • Many beneficiaries no longer qualify for lifetime payout distributions
  • Pre-SECURE Act conduit trusts may inadvertently lead to early distribution taxation
• Spouse beneficiaries or individuals not more than 10 years younger can benefit
• Special considerations for minors, disabled beneficiaries, or chronically ill individuals
• They’re limited by 10-year distribution schedules unless special exceptions apply
• Conduit trusts can disqualify means-tested benefits for certain groups

Break | 3:10pm – 3:20pm

III. Accumulation Trusts & Advanced Distribution Strategies | 3:20pm – 4:20pm

• Definition: Accumulation trusts allow RMDs or retirement distributions to remain in the trust rather than being distributed immediately to the beneficiary
• Key benefits
  • Flexibility for long-term financial planning
  • Options for managing distributions for minors, disabled beneficiaries or chronically ill beneficiaries
• Conduit trusts
  • Trustee distributes all RMDs directly to the trust beneficiary
  • Simpler tax reporting but less flexibility
  • Limited ability for long-term estate planning
• Accumulation trusts
  • Trustee retains RMDs and has discretionary distribution powers
  • Tax planning flexibility & greater asset protection
  • Can be adjusted to fit estate needs for beneficiaries
• Navigating the SECURE Act & strategic impacts
  • The SECURE Act’s 10-year rule and how it affects many non spouse beneficiaries
  • Adjusting estate plans in light of these 10-year payout windows
  • How accumulation trusts can mitigate the risk of tax overreach, delays, or distribution misalignment
• Advanced strategies for asset protection & tax minimization
  • Special needs beneficiaries & tax-qualified charitable gifting strategies
• Planning for disabled/chronically ill individuals or minor children
• Trust customization, beneficiary tax planning, and strategic distributions