May 5, 2020

It might feel as though everything is up in the air with your financial planning situation lately. Since this has impacts on your day to day life and your overall financial picture, it’s important to think about how any changes you make now in light of the pandemic could influence your estate planning picture.

Our estate planning law firm is here to help you evaluate your current strategies or define your next steps for adjusting your strategy. The IRS has been issuing guidance about issues ranging from the Paycheck Protection Program to the ability to pull money from your IRA, but it’s up to you to be informed about how you respond and what you do next.

As of May 2020, you can remove up to $100,000 from your IRA so long as you pay it back within three years and take no tax hit for that transaction. However, you might be looking at some tax issues in the interim. The IRS has chosen to call these transactions coronavirus-related distributions. But as with all aspects of the new programs available to individuals and business owners, proceed with caution.

Each withdrawal and then repayment back into the IRA is treated like a rollover transaction classified as “free.” The good news about this is that there are no limits on what you can use the money you withdraw for, however, you might need to file amended tax returns in order to get the federal-income-tax-free treatment.

If your IRA was also an important component of your retirement and estate plan, you’ll want to think carefully about what makes the most sense in terms of how you proceed and whether pulling money from your IRA is the right choice for you right now. If you need assistance in recalibrating your estate plan or strategies right now, set up a meeting with our office to discuss options- we’re still working and here to help virtually.