Understanding the New SECURE Act - INCOMING!!

March 31, 2020 · 8 min read

By: Stephen R. Elville, J.D., LL.M. – President and Principal Attorney of Elville and Associates, P.C. On March 7, 2020 at our recent Client Care Program continuing legal education event at Anne Arundel Community College, I stated that the SECURE Act, and the income tax ramifications it has for most of our clients (mainly, the acceleration of income tax to beneficiaries of inherited IRAs), is arguably the most important tax and asset protection issue clients have been presented with in the past 10 years. Before we go any further, amidst all the confusion there are, in my view, basically two main issues (or questions) clients and their families need to address. They are: (I) determine whether any changes need to be made to your estate planning documents (in consultation with your estate planning attorney); and (II) determine whether you wish to (or should) address the income tax and other impacts of the SECURE Act on your retirement plan assets, your non-exempt beneficiaries, and your estate plan as a whole, including the acceleration of income tax to your beneficiaries, loss of tax deferral to your beneficiaries, and potential loss of asset protection to your beneficiaries (in consultation with your financial advisor, CPA, and estate planning attorney). If you can focus on these two main overarching issues (questions), I believe you can determine what to do about the new SECURE Act law (if anything) from an estate planning and income tax planning perspective, and act accordingly with minimal confusion or anxiety. In the paragraphs below, I will try to help make sense of the SECURE Act, including what it is, who it affects, and who is exempt. After all of this is summarily explained, I will recommend certain SECURE action steps for estate planning, tax planning, and financial planning, and then I leave you with some questions that only you will be able to answer, about SECURE and whether it represents anything positive despite its negative implications for many people. Let us begin. About seven months ago I wrote an article for this Newsletter describing the then vague prospect of the SECURE Act, proposed legislation that would constitute a series of expansions for individual participation in and contributions to retirement plans in the U.S., along with tax credits, incentives for businesses and individuals, changes to certain long-standing retirement plan-related policies, and the unfortunate elimination of the “stretch” IRA. Introduced by way of two separate colossal proposals in early 2019 - one by the House of Representatives and one by the Senate – the then-proposed SECURE Act would change the length of time that non-exempt persons could defer income taxation upon their receipt of an inherited IRA from a plan participant. Now the mere prospect of the SECURE Act has become a reality with broad-reaching implications. The SECURE Act, signed into law on December 20, 2019 and effective January 1, 2020, now incentivizes employers to establish retirement plans for employees through small business tax credits, and eases the time limitations for employers to implement retirement plans; it removes age limitations for contributions to an IRA (beyond age 70-1/2), changes the required beginning date for minimum distributions from age 70-1/2 to 72, allows for the continuation of Qualified Charitable Contributions with certain adjustments, allows limited penalty-free withdrawals from IRAs ($5,000) for childbirth or adoption (Qualified Childbirth or Adoption Distribution), allows certain annuities to be investments in a 401(k) plan, and many more similar or related changes. And yes, the now-effective SECURE Act exempts certain persons from the effects of the acceleration of income tax on retirement plan assets. But SECURE is largely not favorable for estate planning clients who diligently saved retirement plan dollars throughout their lives and anticipated that the minimum distribution rules for beneficiary IRAs would continue to provide long-term tax deferral for children, grandchildren, nieces and nephews, and other beneficiaries. So after much speculation, what was formerly described by me as a “ballistic missile red alert” but hopeful “false alarm” has now materialized as a full-fledged strike, a direct hit where the damage is similar to that of a neutron bomb - trillions of dollars of retirement plan assets will now be taxed on an accelerated basis, but with a remaining infrastructure, some old, some new, still standing in the aftermath. The SECURE Act affects most estate planning clients by eliminating the “stretch IRA,” the ability for retirement plan participants to leave an IRA or Qualified Plan to their “designated beneficiary” (an individual or certain trusts) over a period of many years during which the beneficiary could, if desired, annually remove only the required minimum distribution from the inherited IRA and leave the balance of funds invested in a tax deferred status over a calculated life expectancy. That is, SECURE affects most, but not all, plans. Specifically, the SECURE Act affects any person who is a participant in a retirement plan and whose goal it is to provide for the lifetime stretch out of required minimum distribution payments to beneficiaries; and also persons who have beneficiary designated their retirement plans to a “conduit” trust for a beneficiary (a conduit trust is a trust for a retirement plan beneficiary that is designed to immediately pay out any required minimum distribution to the beneficiary). Persons who are specifically not affected by the SECURE Act are those persons who do not have a retirement plan, and/or persons who plan to leave their retirement plan assets directly to charity at their deaths. Under the old regime, there were two classes of beneficiaries for inherited IRAs: (I) designated beneficiaries (hereinafter referred to as (“DBs”) (those persons or certain trusts that qualified for life expectancy treatment for required minimum distribution purposes); and (II) non-designated beneficiaries (hereinafter referred to as (“NDBs”) (those persons, trusts, or entities such as an estate, that did not qualify for life expectancy treatment for required minimum distribution purposes). Now under the new regime we have three (not two) classes of beneficiaries of inherited IRA assets: (a) Eligible Designated Beneficiaries (hereinafter referred to as (“EDBs”) - this is the new “preferred case” of retirement plan beneficiaries - persons who are eligible to continue stretching inherited IRAs - and then the old original classes of (b) DBs, and (c) NDBs. Probably the most confusing thing about SECURE is that much of the old law continues to be effective (notwithstanding several unanswered questions that will be clarified when the complete Treasury Regulations are eventually promulgated). In any event, the following EDBs are exempt: (1) spouses; (2) minor children; (3) disabled persons as defined by IRC Section 72(m)(7); (4) chronically ill persons as defined by IRC Section 7702B(c) (2); and (5) persons who are not more than ten (10) years younger than the plan participant. For all persons who are not EDBs (non-EDBs), the ability to stretch out the inherited IRA is now limited to ten (10) years. So to reiterate, DBs, or ordinary “designated beneficiaries”, will no longer have preferred status and will have to take 100% of their inherited IRA funds no later than ten (10) years after the death of the plan participant; while EDBs, the new preferred class of beneficiaries so to speak, will be able to continue the lifetime stretch out of retirement plan assets - that is, so long as beneficiary designations are correct, and in the case of beneficiary designation to a trust, so long as the trust is drafted properly in accordance with the IRS Code and the Regulations. The non-designated beneficiary class of beneficiaries (NDBs) remains part of the law and it is extremely important to consider that NDB treatment can still be triggered, even for EDBs. One important point that is of concern to many clients and families with loved ones who are disabled or chronically ill - although we are still early in the SECURE environment, it is clear that properly drafted special needs trusts will qualify for treatment as EDBs for the protection of these individuals. Is the SECURE Act the monster it has been described to be, or more of a friendly dragon, one that forces us to take a much closer look at retirement plan assets (savings) and how they are actually taxed (and remember, they all (retirement plan assets) are eventually taxed in some form, even for the person who contributes after-tax dollars to a Roth IRA or Roth 401(k))? Doesn’t the SECURE Act potentially have a silver lining (maybe the government should have called it the Silver Act for all the older Americans it will impact), in that it will cause estate planning clients to examine the real outcomes of what happens to inherited IRAs after their deaths, and how they may be able to get ahead of the effects of SECURE by being proactive, thereby making a winning play in the end? The answers may be “yes.” After all, for example, it is generally better to die with a Roth IRA or Roth 401(k), and it is better to provide charities with the full benefit of tax-free contributions from retirement plan assets where the plan participant has genuine charitable intent, and other planning positives that can result after closer scrutiny. So I will leave you to think about and answer these questions for yourself. But to properly do so, it will be necessary for most clients to consult with their advisory team - CPA, financial advisor, estate planning attorney, and in some cases, insurance broker. Do this within the next 12 to 24 months, and you will be doing everything you can to address the estate planning and income tax ramifications of the SECURE Act. Along these lines, there are several potential strategies available to address and deal with the effects of SECURE on your estate planning. I will be available to address your questions and concerns, along with our estate planning team of attorneys, in coordination and collaboration with your Advisors. Remember that any SECURE-related adjustments to your estate planning documents will be relatively straightforward, and Elville and Associates is currently reaching out to all clients to schedule update meetings. We are also doing everything possible to keep you updated, provide action-related advice, educate you and your advisors, and collaborate in the solution process. If you have not yet made an appointment for your SECURE Act update meeting, please contact Mary Guay Kramer via telephone at 443-741-3635 or via email at mary@elvilleassociates.com.

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Thinking about a life estate in Maryland? Learn the benefits, risks, Medicaid concerns, and alternatives before adding children to your deed.

Jan 19, 2026 in Blog

Life Estates in Maryland: When They Make Sense and When They Don’t

A life estate can be a useful planning tool for some Maryland families who want to protect a home, avoid probate, and plan ahead for the future. At the same time, life estates create permanent legal and financial consequences that are often misunderstood. Knowing when a life estate works well and when it creates long-term problems is essential before moving forward. This article explains how life estates function in Maryland, common risks families encounter, how life estates interact with Medicaid planning, and alternatives that may offer greater flexibility. What Is a Life Estate? A life estate allows more than one person to hold ownership interests in the same property at different times. In Maryland, this typically allows a parent to live in and control a home for life while naming children or other individuals to receive the property automatically after death. The person living in the home is called the life tenant. The individuals who will receive the property later are known as remaindermen. While remaindermen cannot take possession during the life tenant’s lifetime, they hold a present ownership interest in the property. Life estate deeds are often used to avoid probate, support long-term planning goals, and simplify the transfer of a home. These benefits must be balanced against the legal limitations created by the deed. When a Life Estate May Make Sense In limited situations, a life estate can serve a practical purpose. This is most common in straightforward family arrangements where a parent intends to remain in the home for life and wants the property to pass directly to a specific individual without probate. Life estates may also be considered when flexibility is not a priority and future long-term care needs are unlikely. Even in these situations, careful legal review is critical before creating the deed. When Life Estates Create Problems for Maryland Families Limits on Selling or Refinancing Once a life estate is created, the life tenant generally cannot sell or refinance the property without the consent of all remaindermen. This can create serious challenges if care needs change or the property must be sold to cover expenses. Some families explore tools such as a testamentary power of appointment or a nominee realty trust to increase flexibility, but these options require careful planning and are not appropriate in every case. Difficulty Changing Ownership Removing a remainderman from a life estate deed is far more complex than changing a beneficiary on a financial account. Once added, that ownership interest is legally significant and often cannot be undone without consent or legal action. Exposure to Remainderman Issues After a remainderman is added to the deed, their legal and financial issues may affect the property. Court judgments, tax liens, divorce proceedings, or bankruptcy can complicate ownership and create unexpected risks. If a remainderman passes away before the life tenant, their interest may pass through their estate, potentially requiring probate and introducing new parties into the ownership structure. Medicaid Look-Back Concerns Creating a life estate involves transferring a property interest. If long-term care is needed within five years of that transfer, Maryland Medicaid rules may impose a penalty period. Timing and structure matter, and mistakes can be costly. Nursing Home Recovery Risks If the home is sold while the life tenant is receiving nursing home care, the state may assert a claim against the proceeds to recover Medicaid benefits paid. This outcome often surprises families. Life Estates and Medicaid Planning in Maryland A common misconception is that a life estate automatically protects a home from Medicaid. While a life estate may avoid probate, it does not replace a comprehensive Medicaid planning strategy. Medicaid planning is highly timing-sensitive and should be coordinated with broader elder law goals. Families often benefit from reviewing life estates alongside other options discussed in our Maryland elder law resources. Alternatives That Offer Greater Flexibility Depending on family goals, other planning tools may provide better long-term outcomes. Revocable trusts, irrevocable trusts, and coordinated elder law planning strategies often allow for asset protection while preserving flexibility and control. These approaches may integrate more smoothly with Medicaid planning and incapacity planning and can reduce risk as circumstances change. Reviewing a Life Estate as Part of a Larger Plan Life estates affect more than property ownership. They influence taxes, Medicaid eligibility, and the ability to respond to future care needs. For this reason, they should always be evaluated as part of a broader estate and elder law plan rather than used in isolation. If you are considering a life estate or already have one in place, guidance from a Maryland elder law attorney can help clarify risks and identify options before a crisis occurs. To schedule a confidential consultation, contact us online, call our Columbia office at 443-339-5638, or reach our Rockville office at 240-456-1657.

Jan 13, 2026 in Blog

Life Estates in Maryland: Benefits, Risks, and Better Planning Options

A life estate can be a helpful tool for Maryland families looking to protect their homes, avoid probate, and plan for Medicaid. It is important to understand the risks involved. This article explains common life estate issues and why careful legal planning matters before deciding if this approach fits your situation. What Is a Life Estate? A life estate allows multiple people to hold interests in the same property at different times. In Maryland, this often means a parent keeps possession and use of their home while ensuring it passes to their children without going through probate. By creating a life estate deed, families may avoid probate, reduce Medicaid exposure, and receive a step up in tax basis. The person living in the home is known as the life tenant and retains control during their lifetime. The individuals who inherit the property are the remaindermen. Although they cannot take possession until the life tenant passes away, they hold a current ownership interest. When a Life Estate May Still Be Appropriate In limited situations, a life estate can serve a practical purpose. Some families use a life estate when a parent wants to remain in the home for life and ensure the property passes directly to a specific individual without probate. This is most common in straightforward family situations where long term care needs are unlikely and flexibility is not a primary concern. Even in these cases, careful review is important. A life estate permanently alters property rights, and future changes often require agreement from all parties involved. Five Issues Maryland Families Should Know 1. Limits on Selling or Borrowing Against the Property A life tenant generally cannot sell or refinance the property without agreement from all remaindermen. A testamentary power of appointment may allow the life tenant to change who inherits the property through a will, providing additional flexibility. A nominee realty trust may allow one or more children to act as trustee for all remaindermen, with decisions made by majority vote. This can be helpful when family members disagree. 2. Difficulty Removing a Remainderman Removing a remainderman from a deed is far more complex than changing a beneficiary on a financial account. In many cases, removal is not possible without consent or court involvement. 3. Legal Issues Affecting the Property Once a remainderman is added to the deed, their financial or legal issues may affect the property. Court judgments or tax liens may attach to the home Divorce or bankruptcy can complicate ownership If a remainderman passes away before the life tenant, their estate may require probate These issues may not force the life tenant to leave the home, but they can create significant complications. 4. Medicaid Look Back Period Transferring a property interest through a life estate can affect Medicaid eligibility if long term care is needed within five years of the transfer. 5. Nursing Home Reimbursement If the property is sold while the life tenant is in a nursing home, the state may have a claim against the sale proceeds to recover care costs. Why Life Estates Often Create Long Term Challenges Many families create life estates without fully understanding the limitations involved. Selling or refinancing the property usually requires consent from the remainder beneficiary, which can become problematic if care needs change or funds are needed. Life estates also expose the property to risks tied to the remainder beneficiary. Financial hardship, divorce, or creditor claims affecting that individual can impact the property even while the life tenant continues to live there. Life Estates and Medicaid Planning in Maryland A common misconception is that a life estate automatically protects a home from Medicaid rules. While a life estate may avoid probate, it does not automatically shield the property from Medicaid eligibility requirements or recovery claims. In some situations, transferring a remainder interest can create a Medicaid penalty period if it is not structured properly or completed at the right time. Because Medicaid planning is highly timing sensitive, a life estate should never be used as a substitute for a comprehensive elder law strategy. Alternatives That Offer More Flexibility Than a Life Estate Depending on a family’s goals, other planning tools may provide better long term results. Revocable trusts, irrevocable trusts, and coordinated elder law planning strategies may offer asset protection while preserving control and adaptability. These options often integrate more effectively with Medicaid planning and incapacity planning. Choosing the right structure depends on health, family dynamics, finances, and anticipated care needs. A solution that works well for one family may create serious limitations for another. Is a Life Estate the Right Option? For some Maryland residents, life estates can provide benefits, particularly when probate avoidance is a primary goal. The risks involved mean this approach is not appropriate for every situation. Understanding both the legal and financial impact is critical. Reviewing a Life Estate as Part of a Bigger Plan Life estates affect more than property ownership. They impact taxes, Medicaid eligibility, and a family’s ability to respond to changing circumstances. For this reason, life estates should be reviewed as part of a broader estate and elder law plan rather than used alone. If you are considering a life estate or already have one in place, speaking with a Maryland elder law attorney can help clarify risks and identify options before a crisis occurs. To schedule a confidential consultation, contact us onlin e, call our Columbia office at 443-339-5638, or dial 240-456-1657 to reach our Rockville office.

2026 Maryland Super Lawyers and Rising Stars Lists

Dec 19, 2025 in Blog

Managing Principal Stephen Elville, Principal Attorneys Shannon Goodwin and Shannon Ladner, and Associate Attorney Sara von Stein Echeverria Honored on the 2026 Maryland Super Lawyers and Rising Stars Lists

Authored by: Jeffrey D. Stauffer – Community Relations Director It was announced on Friday, December 19 th that Managing Principal Stephen Elville, Principal Attorneys Shannon Goodwin and Shannon Ladner, and Associate Attorney Sara von Stein Echeverria were honored on the 2026 Maryland Super Lawyers and Rising Stars Lists. Stephen R. Elville, J.D., LL.M. — Managing Principal Stephen R. Elville, President, CEO, and Managing Principal of Elville & Associates, P.C., has again been selected to the 2026 Maryland Super Lawyers List — his 11th overall and 10th consecutive year receiving this recognition. Mr. Elville’s practice centers on helping individuals and families through challenging legal landscapes with clarity, compassion, and technical skill. He leads the firm’s work in estate planning, elder law, special needs planning, tax planning and asset protection and preservation, long-term care planning, and more. Clients working with Mr. Elville benefit from his deep experience navigating both pre-crisis planning and complex crisis situations — giving them peace of mind and a personalized, long-term strategy. Throughout his career, Mr. Elville has built a reputation as one of Maryland’s most respected attorneys. His broad legal-technical knowledge, combined with a caring and client-focused approach, enables him to address a wide range of legal matters with confidence and clarity. In addition to his client work, he is a seasoned educator and speaker, regularly offering webinars and workshops for clients and the surrounding community, along with continuing education events for financial advisors. Mr. Elville is an active member of several professional organizations including the National Association of Elder Law Attorneys (NAELA), WealthCounsel, the Academy of Special Needs Planners, and as well as the EPIC Peer Group where he travels around the country each quarter learning from and teaching likeminded attorneys. He has held leadership roles including the past Chair of the Estates & Trusts & Elder Law Sections of the Howard County Bar Association, past President of the Coalition of Geriatric Services (COGS), and past Chair of the Elder Law & Disability Rights Section Council of the Maryland State Bar Association. He was also the long-term Chair for Law Day Maryland and recently served as Chair of the Pro Bono Subcommittee of the Elder Law Disability Rights Section Council. Outside of his legal practice, he is President of the Friends of Baltimore Classical Music, Inc. and Founder of the Elville Center for the Creative Arts, Inc. — a nonprofit dedicated to furthering music education for students with limited means. Mr. Elville had a feature story written about him in the national Super Lawyers Magazine about the Elville Center and his efforts surrounding this initiative. Along with his charitable endeavors, Mr. Elville also supports community organizations such as the Autism Society of Maryland, the Brain Injury Association of Maryland, the National Alliance on Mental Illness of Howard County, the Howard County Public Library System Veterans Book Group program, and more. Shannon Goodwin, J.D. — Principal Attorney Shannon Goodwin has been named to the 2026 Rising Stars List for a third consecutive year. In her role as Principal Attorney, she leads Elville and Associates’ Estate and Trust Administration Department along with estate planning and tax planning. Ms. Goodwin guides clients through every aspect of administering estates — from the probate process and inventory reporting, to accountings, final distributions, and all detailed estate tasks. Her insight and dedication help families navigate what can often be complicated and emotionally difficult processes. Her background includes undergraduate studies at North Carolina State University, followed by law school — during which she distinguished herself as a member of the Syracuse Law Review. After graduation, she gained important legal experience working as a Judicial Law Clerk for three years in the Circuit Court for Washington County, and in the District Court for Washington and Frederick Counties. She joined Elville and Associates in 2021, bringing with her a strong foundation and commitment to client care. Shannon F. Ladner, J.D. — Principal Attorney Shannon F. Ladner has earned her place on the 2026 Rising Stars List for the fourth year in a row. She leads the firm’s Estate Planning Department, where she assists clients through every stage of planning — from initial consultation to plan design and implementation, and ongoing updates as laws and life circumstances evolve. Ms. Ladner’s practice emphasizes estate planning and special needs planning. Her work is grounded in a thoughtful, client-centered approach, ensuring that each plan reflects the client’s values, goals, and unique family situation. During law school, she contributed her talents to the Human Trafficking Prevention Project Clinic, representing victims of human trafficking as a Rule 19 Student Attorney. After receiving her J.D., she served as a Judicial Law Clerk for Magistrates Susan M. Marzetta and Lori Joy Eisner in the Circuit Court for Baltimore City. Before joining Elville and Associates, she practiced at a small law firm in Towson, Maryland where she gained valuable experience representing clients in family law and criminal matters. Sara von Stein Echeverria, J.D. — Associate Attorney 2026 is Sara von Stein Echeverria’s first of what we see as many future inclusions on the Maryland Rising Stars list. Ms. von Stein Echeverria focuses her practice on estate planning, estate and trust administration, special needs planning, asset protection, and tax planning. She is known for her thoughtful, client-centered approach and her ability to guide individuals and families through complex planning decisions with clarity, empathy, and care. Sara works closely with clients to develop comprehensive plans that protect loved ones, reflect personal values, and provide long-term peace of mind. Sara earned her Juris Doctor, summa cum laude, from the University of Baltimore School of Law, where she distinguished herself through academic excellence and legal scholarship. She also holds a Master of Science from Birkbeck College, University of London, and a Bachelor of Arts, cum laude, from Dickinson College. Prior to joining Elville and Associates, her work included humanitarian and immigration-related legal advocacy, experience that continues to inform her compassionate and inclusive approach to client service. Sara is admitted to practice in Maryland and is an active member of the Maryland State Bar Association, the American Bar Association, and the Baltimore City Bar Association. To learn more about this year’s honorees and the entire team at Elville and Associates, please visit www.elvilleassociates.com. The firm is steadfast in its commitment to client education, compassionate legal service, and providing peace-of-mind solutions across estate planning, elder law, special needs planning, and beyond. Super Lawyers, a Thomson Reuters business, is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. The annual selections are made using a patented multiphase process that includes a statewide survey of lawyers, an independent research evaluation of candidates and peer reviews by practice area. The result is a credible, comprehensive and diverse listing of exceptional attorneys. The Super Lawyers lists are published nationwide in Super Lawyers Magazines and in leading city and regional magazines and newspapers across the country. Super Lawyers Magazines also feature editorial profiles of attorneys who embody excellence in the practice of law. For more information about Super Lawyers, visit SuperLawyers.com. #elvilleeducation