Estate planners may want to consider advising clients to leave more of their retirement benefits to children with special needs and non-retirement accounts to other children in light of recent changes to the retirement planning landscape. The SECURE Act (Setting Every Community Up for Retirement Enhancement) established an exception for special needs trusts to qualify for stretch distributions. The SECURE Act 2.0 enhanced this crucial exception by allowing special needs trusts to name charitable organizations as remainder beneficiaries and maintain eligibility for stretch distributions.

Retirement planning has undergone a significant transformation with the introduction of the SECURE Act 2.0. One noteworthy provision is that special needs trusts with charitable organizations as remainder beneficiaries now qualify for stretch distributions. This development marks a pivotal change for families seeking enhanced financial security and flexibility for their loved ones with special needs while encouraging charitable intent.

With the rising rate of families with a member who has special needs, the need for special needs financial planning is becoming increasingly important. For these families it is crucial that their loved ones who have disabilities or chronic illness have an established long-term financial plan that will allow them to live comfortably while also enabling them to qualify for and maintain any available government assistance programs such as Medicaid and Supplemental Security Income (SSI). This planning also provides peace of mind for families knowing their loved ones will be taken care of after their passing.