As a donor advocate, I'm continually surveying the philanthropic landscape for new tools and techniques for smart giving. If we are to be good stewards and impactful givers, then we need to adapt to change, whether that change is from technology, tax legislation, family, or other modifications. We want to give back, make a difference, and to serve something greater than self. For many with regards to their financial giving, it is family first and then their favorite charity or impact investment. The giving of our four gifts from our wheelhouse, no matter what the gift, provides us with purpose and meaning.

During my weekly survey of changes that may impact your giving, I noticed there is pending tax legislation that has recently been passed by the U.S. House of Representatives. This new legislation is called the "Setting Every Community Up for Retirement Enhancement Act of 2019,” hence, The SECURE Act of 2019. I wanted to raise awareness, introduce and preview how the SECURE act may impact your giving to family and charity. This pending legislation follows on the heels of the most recent TCJA of 2017 (see my blog here). Because of the general population's lack of financial security in retirement, the SECURE act of 2019’s primary purpose is to enhance retirement well-being by providing additional incentives to save for retirement. There are several parts or components to this legislation and most of it does not impact your giving, whether that be giving to your family or to your favorite charity. From an overall perspective, there are two main components of this legislation that make it "watch-worthy" with regards to your giving. These two items are:
  1. The change in the age of Required Minimum Distribution (RMD) from age 70 1/2 to 72, and
  2. The capping of the time limit for stretch provision for inherited IRA non-spousal beneficiaries.

Let's take a look at each of these two aspects of the pending legislation in a little bit more detail and how it may impact your giving. First off, we’ll break down the proposed change in the age of Required Minimum Distribution from your IRA from age 70 1/2 to 72. Besides the advantage of additional tax deferral with the increase in age, there is the possibility of change of the qualified charitable distribution (QCD) which allows a direct contribution from the IRA to a qualified charity. Please refer to my previous blog on the qualified charitable distribution for details and qualifications. With this pending legislation, the question arises: if the age for the RMD changes from 70 1/2 to 72, does the eligibility age for the QCD change from 70 1/2 to 72 as well? It appears at this time that the age for the QCD will remain at age 70 1/2.

The other aspect of the SECURE act is the time limit on the stretch IRA for non-spousal beneficiaries of the deceased. Non-spousal IRA beneficiaries can currently stretch the payout from an inherited IRA over the beneficiaries life expectancy. Assets of a stretch IRA continue to grow tax-deferred. The use of the stretch provision is a compelling way for wealth to transfer to the family for those with significant IRAs. For example, let's assume a grandchild (age 15) is the beneficiary of an inherited IRA and has an approximate life expectancy of another 70 years (to age 85). Under current provisions, the payout from the IRA could conceivably be "stretched" out during the next 70 years! The existing version of the SECURE act proposes a 10-year time limit--whether that be a traditional IRA or a Roth IRA. Thus, the stretch provision from a traditional IRA may be severely curtailed. As with most tax legislation, those wishing to avoid the potentially higher taxes will seek alternative solutions. In this specific case and depending on each situation, Roth conversions, life insurance, sprinkling (spray) trust provisions, and other tools may be appropriate to mitigate the increased tax impact of this 10-year distribution time limit.

As you can see from the SECURE act, there may be changes in the way we give. For many individuals currently making, or anticipating making QCD's from their IRA's, a pivotal point to watch is whether the age eligibility will stay at 70-1/2 or increases to age 72. We will continue to stay abreast of leading-edge giving and the evolving philanthropic landscape--and to serve as your advocate so that you may make smart and impactful giving decisions.

So, stay tuned and let’s do some good!


Coming Next:Introducing Aspire, the Avatar of the Giving Heart


©2019 Aspire to Give®. All Rights Reserved. Greg Doepke is a Chartered Advisor in Philanthropy® and a Certified Financial Planner®. Greg serves on the Board of Directors for the International Association for Advisors in Philanthropy and as the Philanthropist in Residence at Auburn University’s Cary Center for the Advancement of Philanthropy and Nonprofit Studies. As the founder of Aspire to Give® Greg educates and equips individuals, families, business owners, and foundations with both traditional and leading-edge philanthropic tools and techniques for smart, meaningful, and impactful giving. You can contact Greg at This email address is being protected from spambots. You need JavaScript enabled to view it.

Start Your Giving Journey Today

If you are interested in learning more about Aspire to Give®'s pursuit to advance philanthropy through donor-focused education, social innovation, collaboration, and advocacy, please reach out to Greg Doepke:

Disclosure: Greg Doepke is the founder and principal of Aspire to Give®, a social enterprise that donates 100% of all profits to charity and is dedicated to unleashing the human spirit to advance philanthropy through donor education, social innovation, collaboration, and advocacy.
The thoughts and opinions expressed in this blog are not representative of the views of ACG Advisory Services, Inc. or the Actuarial Consulting Group, Inc. of Midlothian, Virginia. Each client and prospective client agrees, as a condition of precedent to his/her/its access to Aspire to Give®’s website to release and hold harmless ACG Advisory Services, Inc. and Actuarial Consulting Group, Inc., their officers, directors, owners, employees, and agents from any and all adverse consequences resulting from any of his/her/its actions and/or omissions which are independent of his/her/its receipt of personalized advice from Aspire to Give® or Gregory W. Doepke.