Retirement Accounts After SECURE 2.0: Coordinating Trusts and Beneficiaries Without Triggering a Tax Surprise

After the SECURE Act and SECURE 2.0, the rules for inheriting retirement accounts changed, especially when a revocable trust is named as the beneficiary. Most non-spouse heirs now face a 10-year payout limit, and if the trust isn’t structured correctly, the tax bill can spike. This matters for anyone who’s trying to protect beneficiaries, control distributions, or avoid probate while keeping retirement tax planning intact.

Conduit vs. Accumulation Trusts: What’s the Difference?

If your revocable trust is named as the IRA beneficiary, the trust must meet “see-through” requirements. From there, the strategy splits into the following:

• Conduit trust: This passes each required distribution straight to the beneficiary. It works well when that beneficiary is a spouse or someone who qualifies for stretch treatment, such as a disabled child or a minor under 21. However, it offers little creditor or control protection since the funds flow out immediately.
• Accumulation trust: This lets the trustee hold those funds instead of passing them out right away. This adds protection, but it comes with higher taxes; retained income above roughly $15,650 (in 2025) is taxed at the top federal rate of 37%.

SECURE 2.0: New Rules, New Timing

Under SECURE 2.0, the Required Minimum Distribution (RMD) age increased to 73 and will rise to 75 by 2033. The 10-year rule still applies for most adult children or non-spouse heirs. 

If the account owner dies after their RMD start date, annual RMDs are also required within that 10-year window. For Florida residents, new trust accounting rules (effective 2025) also affect how plan distributions are treated inside certain trusts.

Plan With the Right Tools

The most tax-efficient method will depend on your intent and your beneficiaries’ needs, as well as the way the trust has been structured. Double-check the trust language to ensure it reflects those intentions and that you’ve filed the appropriate forms on time. If you aren’t certain whether you are taking a conduit or accumulation approach, we can help you evaluate the pros and cons of each and ensure that everything is filed timely for the IRS.

At Schnauss Naugle Law, we help clients build retirement and estate plans that hold up across generations and jurisdictions. Call us at 904-643-6342 or complete our intake form to get started.