Changes In The Wind for Retirement Benefits – Possible

By Gene M. Carlino September 23, 2019Estate & Trust Law

Last spring the United States House of Representatives by an over whelming majority passed the most significant changes to the IRA/401(k) laws since their original passage in the mid 1970’s. If signed into law these changes will:

  • allow part-time workers who work less than 1,000 hours a year to contribute to a 401(k) plan;
  • allow contributions to IRAs after the existing age 70.5 age limit;
  • delay the age for the start of required minimum distributions to 72;
  • allow penalty free early withdrawals from a retirement account of up to $5,000 per parent f or the birth or adoption of a child; and,
  • allow small employers who may not otherwise be able to afford the administrative costs of a 401(k) plan to band together and offer a pooled 401(k) plan; and,
  • liberalize the rules related to annuity investments for 401(k)s with the goal of creating lifetime income retirement benefits.

To offset the Federal Government’s loss of tax revenue caused by these changes, the proposed law provides, with certain exceptions, that a beneficiary of deceased person’s IRA or 401(k) can no longer stretch out distributions over the beneficiary’s own lifetime. Under the new proposed law, a beneficiary must now withdraw the entire plan balance within 10 years of the date of the original account owner’s death. The exception applies when the beneficiary is a spouse, a minor child or a disabled or terminally ill person. Unfortunately, the exception does not extend to a trust established for a person in this class unless all other beneficiaries in the trust fit are in one of these classes, which is uncommon.

Before the new law can be presented to the President for signature, the Senate must pass the bill passed by the House. To avoid debate on the Senate floor, the bill must pass unanimously. As of the last count, three US Senators were holding out on commitments to vote for passage. If the bill is not passed unanimously by the Senate there appears some risk that the bill will not make it to the Senate Floor due to competition with other legislative and political priorities. Stay tuned and we will be sure to update you. For more information about the legislation or estate planning, tax and retirement strategies and retirement planning, please contact PLDO Partner Gene M. Carlino in Rhode Island at 401-824-5100 or in our Florida office at 561-362-2030 or email



Disclaimer: This blog post is for informational purposes only. This blog is not legal advice and you should not use or rely on it as such. By reading this blog or our website, no attorney-client relationship is created. We do not provide legal advice to anyone except clients of the firm who have formally engaged us in writing to do so. This blog post may be considered attorney advertising in certain jurisdictions. The jurisdictions in which we practice license lawyers in the general practice of law, but do not license or certify any lawyer as an expert or specialist in any field of practice.

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Gene M. Carlino is a Partner with Pannone Lopes Devereaux & O'Gara LLC. He is a highly respected attorney with more than 25 years of experience in all areas of estate and tax planning and administration, Medicaid planning, probate administration and trust litigation. His practice includes advising and advocating for clients in all matters involving federal and state taxation, including representing individuals before the Internal Revenue Service in contested assessments during the examination phase, before the Appeals Division, and at trial in the United States Tax Court, the United States Court of Federal Claims, and the Federal District Court. Prior to joining the firm, he was the founder and successful business owner of Carlino Law Associates, PC since 1999. Attorney Carlino is a prominent member of the legal community, and was honored by his peers and judges with the AV Preeminent rating from Martindale Hubbell, which is the highest rating based on both legal ability and ethics. He has vast experience in all phases of the tax collection process, including negotiating installment agreements, Offers in Compromise, penalty abatement requests if reasonable cause exists and advising clients on how to properly structure their affairs within the bounds of the law, so as to better position clients for a favorable settlement and to avoid unnecessary exposure to collection procedures. In addition, he advises clients in all matters of federal income tax planning, including structuring and implementing like-kind exchanges from routine to a highly sophisticated nature, and advising corporate taxpayers and shareholders in connection with tax-free reorganizations. In his estate and trust planning and administration practice, he counsels clients in a wide range of areas that include funded revocable trusts, funded irrevocable trusts, funded life insurance trusts, planning for families with a noncitizen spouse and for families with special needs children or beneficiaries, grantor retained annuity trusts, sales to irrevocable trusts using a conventional promissory note and/or using a self-canceling installment note, and domestic asset protection trusts. In addition, Attorney Carlino has significant experience in the practice of Elder Law, including advising individuals in all phases of the Medicaid planning and the eligibility process, assisting in designing and implementing Medicaid plans and handling appeals through the state administrative hearing process. Attorney Carlino earned his J.D. from Boston University School of Law, his LLM in Taxation from New York University School of Law and a B.S. in Accountancy from Providence College, magna cum laude. He is licensed to practice in Rhode Island, Massachusetts and Florida and also admitted to the United States Tax Court, United States Court of Federal Claims, the Federal District Court of Rhode Island and the United States District Court for  the Southern District of Florida. He is also licensed by the National Football League Player's Associations as a contract advisor.

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