CGA Law News & Blog

SECURE 2.0 & Other Important Changes to Estate Planning Law for 2023

access_time Posted on: February 1st, 2023

Happy New Year!  This year brings to us several legal changes which will benefit to taxpayers for 2023 and beyond.  For more details, contact CGA Law Firm’s Estate Planning attorneys.  

Increase for Estate Tax Exemption.  This year, the amount that an individual can transfer estate tax-free automatically increases for estates of decedents passing away in 2023 from $12.06MM to $12.92MM, an inflation-index increase of $86,000.  A married couple enjoys a combined exemption of $25,840,000.  Keep in mind, however, that the exemption amount will decrease in the end of 2025 with the sunset of the 2017 Tax Cut and Jobs Act, unless Congress take prior action to extend or modify this exemption. 

Increase in Annual Exclusion Amount.  The annual gift tax exclusion amount is the amount a taxpayer may gift to any non-spouse person without triggering a gift tax reporting obligation.  This annual exclusion amount will increase $1,000, from $16,000 to $17,000, in 2023.  Both husband and wife can make an annual exclusion gift to the same person, so that a total of a $34,000 gift can pass estate-tax free from a married couple. However, any gift above $17,000 technically incurs a gift tax reporting requirement to the IRS.

Adoption of SECURE 2.0.  Congress provided a late holiday gift to taxpayers by including changes known as SECURE 2.0 as part of the 2022 Consolidated Appropriations Act, signed into law on December 29, 2022.  These changes build upon 2019’s SECURE Act 1.0 which improved the usability of retirement plans.  SECURE 2.0 makes further changes which retirees will find beneficial, including (among many others) the following important changes:

  • Higher ages for RMDs. The age at which individuals must withdraw a required minimum distribution (“RMD”) from their account was increased to 72 by SECURE 1.0, and is now further increased to 73 for those turning age 72 in 2023.  Those who turned 73 prior to 2023 must continue to take RMDs as before.  In 2033, the RMD requirement age will increase to age 75.
  • Decreased penalties.  Penalties for failing to take an RMD will decrease in 2023 from the current 50% to 25% of the RMD amount; the penalty further decreases to 10% for IRAs if corrected in a timely manner.
  • Catch-up increase.  Catch-up contributions for workplace plans will increase beginning 2025 for those age 60 – 63 to $10,000 per year, up from $7,500 now for all those over 50.  Those with 401(k), 403(b), and IRA accounts will all benefit in different ways from SECURE 2.0.
  • – Changes for ROTH accounts.  SECURE 2.0 makes several important changes for those with ROTH accounts, including allowing an “emergency savings account” related to defined contribution retirement plans, and, beginning in 2024, the waiver of RMD requirements from Roth accounts in employer plans.
CGA Law Firm Attorney Frank Countess

Frank Henisse Countess

Shareholder | Attorney

Frank Henisse Countess is a Shareholder with CGA Law Firm. He concentrates his practice in the areas of real estate, business law, commercial transactions, and estate planning and administration. Frank was the chair of CGA Law Firm’s Real Estate Group for seventeen years, and is a licensed real estate broker and licensed title insurance agent. He also serves as a member of The York County Board of View, which resolves real estate disputes that arise in the York County Court of Common Pleas.

Read Frank’s Bio Page in full HERE.

CGA Law Firm Attorney Tim Bupp

Timothy J. Bupp

Estate Law Chair | Shareholder | Attorney

Timothy J. Bupp is a Shareholder with CGA Law Firm and chairs the Firm’s Estate Law Section. He provides clients with specialized advice in Estate Planning, Business and tax planning, Real Estate transactions and related matters. Tim assists his clients by utilizing the knowledge he gained from his advanced degrees in business administration, business taxation, and law, as well as his certifications in estate planning and employee benefits taxation. He counsels individuals and businesses with estate and wealth transfer planning, business succession planning, entity formation or acquisition, and tax planning. 

Attorney Bupp has earned the designation of Certified Elder Law Attorney from the National Elder Law Foundation, the only ABA-approved Elder Law certification approved by the Pennsylvania Supreme Court.

Read Tim’s Bio Page in full HERE.