/PRNewswire/ -- People who are nearing or planning for retirement will be hearing from their advisors this fall about changes in federal law that could have a huge impact on their financial plans.
From Roth IRA conversions to the estate tax, there is a lot on the horizon to consider for individuals who want to have enough money for retirement, ensure the continuation of a family business, or leave an inheritance to a charity or their heirs.
"What happens in the next few months could cause some of the biggest changes we've seen in the trusts and estates field," said Roy Adams, professor emeritus of estate planning and taxation at Northwestern University School of Law where he taught both subjects for 25 years.
Adams is going to explain recent and upcoming changes and offer suggestions for dealing with them September 14 in a presentation at the Minneapolis Convention Center. Securian Trust Company and The Salvation Army are co-sponsoring the live event in Minneapolis for estate planning professionals entitled, "Coping with Change - Like It or Not." This is the 17th Annual Estate and Charitable Gift Planning Institute in the Twin Cities and usually draws 700 to 800 tax, estate, and wealth management professionals.
At the heart of the pending changes is the estate tax. In 2010 it is scheduled to be repealed for one year. In 2011, it will revert to its 2000 version. Though many believe that is unlikely to happen, there will be changes to estate and gift tax rules and Americans need to prepare for that. The changes could have an impact on family-owned businesses and heirs and also could affect other aspects of financial planning including charitable contributions and gift taxes.
To add even more drama, the income limitation on converting regular IRAs, 401(k) accounts, and 403(b) accounts to Roth IRAs will be removed in 2010, opening it up to wealthy individuals. The expectation is that many will want to capitalize on this opportunity.
Adams' co-presenter, Christopher Hoyt, is a professor at the University of Missouri - Kansas City School of Law where he teaches courses in federal income taxation and business operations. Hoyt also is the co-chairman of the American Bar Association committee on charitable organizations.
"Coping With Change - Like It or Not," will be broadcast live to several locations throughout North Dakota and Minnesota, as well as nationally. The presentation in Minneapolis is free and open to the public: Go to http://www.thesalarmy.org/cont/royadams.htm to register.
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Tuesday, August 25, 2009
Estate Planners Await 'Big Bang' in 2010 From Tax and Retirement Law Changes
Friday, January 16, 2009
U.S. Labor Department finalizes rule on investment advice for 401(k) plans and IRAs
/PRNewswire-USNewswire/ -- The U.S. Department of Labor today announced publication of a final rule to make investment advice more accessible for millions of Americans in 401(k) type plans and individual retirement accounts (IRAs). The final rule will be published in the Jan. 21, 2009, edition of the Federal Register. The rule includes a regulation that implements the new statutory exemption for investment advice added to the Employee Retirement Income Security Act (ERISA) by the Pension Protection Act (PPA) and a related class exemption.
"Access to professional investment advice is particularly important now for workers as they manage their 401(k) plans and IRAs in changing and volatile financial markets," said Secretary of Labor Elaine L. Chao.
The final rule provides general guidance on the exemption's requirements, including computer model certification and disclosures by fiduciaries. The regulation also includes a model form to assist advisers in satisfying the exemption's fee disclosure requirement. In addition, the final rule includes a class exemption expanding the availability of investment advice.
The PPA amended ERISA by adding a new prohibited transaction exemption that allows greater flexibility for participants of 401(k) plans and IRAs to obtain investment advice. One of the ways in which investment advice may be given under the exemption is through the use of a computer model certified as unbiased. The other way is through an adviser compensated on a "level-fee" basis. Several other requirements also must be satisfied, including disclosure of fees the adviser is to receive.
"Millions of American workers are responsible for managing their 401(k) and IRA accounts. The department took extraordinary steps to engage a broad spectrum of participants, employers, plan fiduciaries and others throughout the rulemaking process," said Bradford P. Campbell, assistant secretary of the Labor Department's Employee Benefits Security Administration. "The final rule expands access to investment advice without compromising the critical protections for plan participants and beneficiaries."
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