The SECURE Act playbook for advisors: Helping clients leave IRA assets more efficiently (PATH)

byGabe Myers

Explore inherited IRA rules and compare strategies advisors can use to help clients transfer wealth more efficiently, including PATH legacy planning.

The SECURE Act changed how inherited IRA assets move to the next generation. For advisors, the planning opportunity is to help clients compare what heirs may receive after taxes, distribution requirements, and implementation costs.

This playbook reviews the distribution mechanics, compares three transfer strategies, and explains where Peak Pro Financial’s PATH fits. Use it to structure discovery, identify suitable cases, and coordinate recommendations with clients’ tax and legal professionals.

Key takeaways: SECURE Act IRA planning for advisors

• Most non-spouse designated beneficiaries must distribute inherited IRA assets within ten years, subject to important exceptions and beneficiary-specific rules.
• Annual RMDs can apply during that window when the original traditional IRA owner died on or after their required beginning date.
• Planned withdrawals, Roth conversions, and insurance-based legacy planning address different objectives and should be compared using consistent assumptions.
• Peak Pro Financial’s PATH provides advisor support for evaluating legacy strategies; it does not make IRA distributions automatically tax-free.
• Suitability, liquidity, underwriting, policy costs, and ownership structure matter as much as the projected tax treatment of transferred assets.

What the SECURE Act changed for IRA beneficiaries

The SECURE Act generally replaced life-expectancy distributions with a ten-year deadline for designated beneficiaries who are not eligible designated beneficiaries, for IRA owners dying after 2019.

For beneficiaries subject to this rule, the inherited account must be emptied by December 31 of the tenth calendar year following the owner’s death. The annual distribution requirements depend on the original owner’s required beginning date, or RBD, and the account type.

When annual distributions may be required

For a traditional IRA inherited by a designated beneficiary subject to the ten-year rule, annual RMDs generally apply in years one through nine if the owner died on or after their RBD. The remaining balance must still be distributed by the year-ten deadline.

If the owner died before the RBD, that beneficiary generally has no annual RMD requirement within the window. The final deadline still applies. The final regulations apply beginning in 2025; earlier transitional relief should not be mistaken for an ongoing exemption.

The RBD is generally April 1 following the year the owner reaches their applicable RMD age. Confirm the client’s birth cohort rather than using one age for every case.

Which beneficiaries have different options

Eligible designated beneficiaries may qualify for life-expectancy distributions or other special treatment. The IRS beneficiary guidance identifies these categories:

• Surviving spouses.
• The account owner’s children who have not reached age 21.
• Individuals meeting the applicable disability or chronic-illness definitions.
• Individuals not more than ten years younger than the owner.

For the owner’s minor child, the ten-year period generally begins at age 21. Spouses have additional options. Estates, charities, and trusts require separate analysis; do not apply individual-beneficiary rules to every designation.

Identify the client’s wealth-transfer planning gap

Start by separating assets needed for retirement from assets genuinely intended for heirs. A legacy strategy should preserve the client’s income, emergency reserves, and capacity to absorb future care expenses.

Then evaluate the beneficiaries’ likely circumstances. An adult child receiving IRA distributions during high-income working years may face a different tax result than a beneficiary expecting retirement or a temporary income reduction.

Build a baseline showing projected distributions, taxes, and net inheritance. Compare alternatives using consistent assumptions for returns, longevity, tax rates, and costs. Include the client’s lifetime taxes, not just taxes paid by heirs.

Your discovery questions should establish who receives the assets, when they may need them, and which trade-offs the client will accept.

Compare strategies for leaving IRA assets more efficiently

Planned withdrawals, Roth conversions, and insurance-based legacy planning offer different ways to address the transfer problem. Compare them against the baseline before recommending a product or implementation schedule.

StrategyHow it worksPotential advantageLimitation to evaluatePlanned withdrawalsTake traditional IRA distributions during the owner’s lifetime, potentially using lower-bracket years.Reduces the IRA balance heirs must distribute and gives the owner control over timing.Pre-tax amounts remain taxable. Reinvested proceeds may generate additional taxes.Roth conversionsConvert traditional IRA assets to a Roth IRA and recognize taxable income to the extent applicable.Qualified inherited Roth distributions are income-tax-free; original Roth IRA owners have no lifetime RMDs.Conversion taxes, Medicare premium effects, and available tax-payment funds can change the result.Insurance-based legacy planningUse net, after-tax IRA distributions or other available funds to pay life insurance premiums.Death benefits are generally income-tax-free and may support a defined legacy objective.Underwriting, premium commitments, policy charges, surrender restrictions, lapse risk, and ownership structure require review.

A combination may be appropriate. Partial Roth conversions and insurance funding can serve different objectives, but combining strategies adds complexity. Model the complete household cash flow rather than evaluating each component in isolation.

Where PATH fits in the advisor’s playbook

PATH, Passing Assets Tax-Free to Heirs, connects legacy planning with Peak Pro Financial’s advisor-support resources, including training, case design, analysis, and implementation coordination.

For your practice, PATH can support a structured evaluation of qualified assets intended for wealth transfer. Position that evaluation around the client’s objectives, available funding, and documented alternatives.

Be explicit about the mechanics: IRA assets cannot be rolled directly into life insurance tax-free. Distributions generally create income tax to the extent they represent pre-tax amounts. The after-tax proceeds can then fund premiums. Any favorable death-benefit treatment is separate from the taxation of those IRA withdrawals.

Evaluate suitability before recommending a strategy

An insurance-based recommendation requires a sustainable funding plan and an appropriate client profile. Confirm:

• Qualified assets exceed foreseeable retirement and liquidity needs.
• Underwriting results support an acceptable premium and benefit relationship.
• Premiums remain affordable under less favorable circumstances.
• Policy charges, surrender restrictions, and nonguaranteed assumptions are understood.
• Ownership and beneficiary arrangements match the estate plan.

Stress-test longevity, lower crediting, and changes in funding capacity. Review guaranteed and nonguaranteed values separately. Avoid comparing an optimistic policy projection with an unduly conservative investment baseline.

Coordinate with tax and legal professionals

The CPA should evaluate distribution and conversion taxes, potential Medicare premium effects, and the timing of implementation. The estate planning attorney should review ownership, beneficiary designations, trusts, and transfer consequences.

Income-tax exclusion and estate-tax exclusion are separate questions. Life insurance proceeds may be included in the insured’s gross estate when the insured retains incidents of ownership. Certain transfers within three years of death can also cause inclusion. A trust does not automatically eliminate these concerns or remove an IRA from the estate.

Turn the analysis into a client action plan

Document the recommendation as a coordinated process, with clear responsibilities and review dates. Your implementation file should include:

1. The client’s income, liquidity, and legacy objectives.
2. A baseline and alternative projections using comparable assumptions.
3. The reasons the selected approach fits better than the alternatives.
4. A distribution, conversion, or premium-funding schedule.
5. Assigned responsibilities for you, the CPA, attorney, and insurance specialists.
6. Annual reviews of beneficiary designations, funding, policy performance, and changing circumstances.

Bring a suitable case to Peak Pro Financial for PATH evaluation. Keep the recommendation grounded in documented analysis rather than a tax-free headline.

Frequently asked questions about IRA legacy planning

Does the ten-year rule always require annual distributions?

No. For designated beneficiaries subject to the ten-year rule, inherited traditional IRA annual RMDs generally depend on whether the owner died on or after their RBD. The account must still be emptied by December 31 of the tenth year following death. Other beneficiary categories have different rules.

Are inherited Roth IRA distributions taxable?

Qualified inherited Roth IRA distributions are generally income-tax-free. The five-year holding requirement matters, and earnings can be taxable if it has not been satisfied. Most non-spouse designated beneficiaries remain subject to the ten-year deadline, but generally need not take annual distributions during that window.

How does PATH help advisors address legacy planning?

Peak Pro Financial’s PATH provides training, case design, and implementation support for evaluating legacy strategies. Use that support to compare alternatives and assess potential insurance-based planning. The program’s name does not mean an IRA withdrawal becomes tax-free or every case avoids estate tax.

How do IRA and life insurance tax treatments differ?

Inherited traditional IRA distributions generally create ordinary income to the extent of pre-tax amounts. Life insurance death benefits are generally excluded from beneficiaries’ federal gross income, subject to exceptions. Estate tax is a separate analysis involving ownership, beneficiary arrangements, and applicable law.

What risks should advisors explain before implementation?

Explain distribution taxes, underwriting, policy charges, premium commitments, liquidity restrictions, and lapse risk. Nonguaranteed policy values can change. Loans or withdrawals can reduce available benefits and create tax consequences in some circumstances. Recommend implementation only after reviewing these risks with the client and their professional team.

Talk to Peak Pro Financial

If your clients have substantial qualified assets, the question isn't just who will inherit them. It's how much of that inheritance will actually make it to the next generation. Let's talk about how the SECURE Act's 10-year rule could affect your clients' heirs and what planning opportunities may exist before the assets are distributed.

Reach out to Peak Pro Financial. Because waiting until the inherited IRA arrives may leave the beneficiary with fewer options and a much bigger tax bill.

Learn more about PATH, one of Peak Pro Financial's tax-efficient legacy strategies for high-net-worth clients.

Or call us at 866.866.7050

The content is hypothetical and illustrative only, based on stated assumptions about income, filing status, and current tax law. It is not a projection or guarantee for any individual, and tax outcomes vary by state, income, and circumstances. Consult a qualified tax professional before making decisions about an inherited retirement account.