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Estate Planning Organizer

Please review and complete the attached Estate Planning Organizer in advance of your introductory estate planning meeting.  Family names and contact information, along with a breakdown of your assets/liabilities are most relevant for estate planning purposes.  If you maintain a listing of assets in a separate format, please feel free to forward that list as opposed to completing the asset/liability section of the form.

Estate Planning Organizer (Fillable Forms)

The Holidays And The Gift Of Family Harmony: The Importance Of Proper Estate Planning To Avoid Litigation After Your Passing

This year, when many will not be able to spend the holidays with loved ones because of COVID-19 fears or restrictions, the thoughts and memories of family gatherings at the holidays will likely bring both joy and sadness.  Not all families, however, associate the holidays with harmonious family gatherings.  In recent years, the litigators at our firm have seen an increasing amount of litigation cases resulting from poor or no estate planning.  Many times, the litigation is between siblings that have never gotten along, and once their parents pass away, they are left with no one to try and keep the peace between them.  Sometimes, however, the parents did something, or did not do something, that leads to disputes between family members at the passing of the second to die parent.

Many people forego proper estate planning because of the perceived cost of having an attorney prepare the documents, and the proliferation of online websites offering low-cost, do it yourself estate planning. Others simply don’t want to face their own mortality and engage in the process. This can, however, lead to costly litigation and unintended consequences.

Americans are fascinated with celebrities, and despite their fame and fortune, there are many examples of contested litigation after their passing. Some notable examples of these celebrity estate disputes over the years include: Casey Kasem, Anna Nicole Smith and the Estate of J. Howard Marshall II, Martin Luther King, Jr., Tom Clancy, James Brown, Tony Curtis, Jimi Hendrix, Prince, and. Kurt Cobain. More recently, disputes have arisen in the estate of the “Queen of Soul”, Aretha Franklin, whose situation provides a cautionary tale for those inclined to avoid estate planning, or to prepare documents themselves.

Everyone knows the iconic lyrics to Ms. Franklin’s song “Respect”: “What you want, baby, I got it. What you need, do you know I got it?…. I’m about to give you all of my money; and all I’m askin’ in return, honey….”  Unfortunately, the disposition of all of her money at her death is in limbo, and the Queen of Soul’s actual wishes may be known, but not followed.

On August 16, 2018, it appeared that Ms. Franklin died without a will to govern disposition of assets at her death.  Her four sons expected that her estate would be split evenly between each of them under Michigan’s laws of intestacy, which is the statutory disposition of assets when someone dies without a will.  In 2019, however, Ms. Franklin’s longtime attorneys disclosed the discovery and existence of several handwritten wills, found in one of her homes.  These documents were only signed by her, and contained notes in the margins, or delineations, and crossed out words and provisions.

This surprising turn of events shook up the administration of Ms. Franklin’s estate and pitted family against one another in court.  A Petition for Instructions on Validity and Admission of a Purported Holographic Will was filed on May 20, 2019 submitting three holographic wills to the probate court.[1]  This left it up to the probate court to decide whether these alleged handwritten wills, that contradicted each other, referred to in the legal community as “holographic wills”, are valid and control the disposition of Ms. Franklin’s estate.

In Maryland, the handwritten documents would be held invalid and Ms. Franklin’s estate would be distributed under the laws of intestacy and divided equally among her four sons.[2] This is because Maryland, unlike Michigan, only recognizes holographic wills under extremely limited circumstances, and offers none of the flexibility built into Ms. Franklins home state of Michigan. Maryland only recognizes holographic wills of a Maryland domiciled decedent the armed services and sign the holographic will outside of the U.S., D.C., or any U.S. territory.[3] Even if this limited exception is met, the holographic will is automatically voided one year after the testator is discharged from the armed forces, further limiting its control of the decedent’s estate.[4] To be valid under Maryland law a will must meet the following requirements to be valid: (1) In writing; (2) Signed by the testator, or by some other person for the testator, in the testator’s presence and by the testator’s express direction; and (3) Attested and signed by two or more credible witnesses in the presence of the testator.[5]  These statutory requirements are strictly construed.  For example, a will signed by the testator and witnessed by only one witness, even if that witness is a notary public, is invalid. The only exceptions under Maryland law are, as noted above a valid holographic will, or a will executed by the testator or testatrix in conformance of the laws of their prior place of domicile or where they were physically located when the will was signed.

Michigan, however, has a much broader definition and acceptance of holographic wills. Under Michigan law, such a document is valid “whether or not witnessed, if it is dated, and if the testator’s signature and the document’s material portions are in the testator’s handwriting.”[6] Under Michigan law, extrinsic evidence, outside the four corners of the document and parts of the document not in the testator’s handwriting, is also admissible to prove their intent. Under Maryland law, absent a latent ambiguity[7] in the document, extrinsic evidence is not admissible to prove the testator or testatrix’s intent.

Ms. Franklin, as could many others who die with no will or documents they prepared themselves, could have saved her family the time and expense of protracted probate and litigation if she had proper estate planning in place. The well-known idiom, you get what you pay for, certainly applies in this situation.  The one-size fits all product that has you input information into a computer and spits out a resulting document, may work in some instances, but the lack of personal touch, especially the ability to delve deeper into your specific family situation and needs, can result in a document that fails to address your needs. Similarly, trying to create a legal document by using a sample form you pulled up on the internet, may result in a document that is deemed invalid, or leads to more questions than answers.

The best way to try to ensure that your wishes are followed at your passing, and to try to promote family harmony, is to meet with an attorney and have proper estate planning in place.  Even if the family members don’t see eye to eye on matters, having documents in place that are clear and concise, and in accordance with Maryland law, can help mitigate potential issues and litigation.


[2] Md. Code Est. & Truss § 3-101 and 3-103.

[3] Md. Code Est. & Trusts § 4-103(a).

[4] Md. Code Est. & Trusts § 4-103(b).

[5]Md. Code Est. & Trusts § 4-102.


[7] A latent ambiguity arises when the language at issue is clear on its face but upon introduction of extrinsic evidence, it reveals multiple interpretations. For example, a will that leaves assets to John Smith, could refer to multiple individuals known by the testator or testatrix, which would require introduction of extrinsic evidence to reveal this ambiguity and to help sort out their intent as to which John Smith is referred to in the document.

Estate Tax Planning in Advance of the 2020 Presidential Election

Many high net worth clients are taking advantage of the heightened Federal Estate/Gift Tax exemption through lifetime giving to their intended beneficiaries (or a trust for their benefit) prior to any planned (or unplanned) drop in the Federal Estate/Gift Tax exemption.


  • The Tax Cuts and Jobs Act (TCJA) enacted by President Trump in 2017 increased the Federal Estate/Gift Tax exemption (“Federal Exemption”) (the amount you can pass to beneficiaries free from estate/gift tax either during lifetime or at death) to $10 million indexed for inflation (currently $11.58 million for 2020), an increase from $5 million indexed for inflation in 2017. The Maryland Estate Tax Exemption remains at $5 million per spouse. Distributions to spouses and charities are exempt from tax.
  • All assets transferred either during lifetime (or at death) in excess of the Federal Exemption are subject to a 40% Federal Estate/Gift tax plus any state level estate tax. Assets in excess of the Maryland Estate Tax Exemption will be taxed at 16%.
  • The Federal Exemption is set to “sunset” back to $5 million indexed for inflation in 2026, absent legislative action.
  • Vice President Biden, if elected, has proposed a reduction in the Federal Exemption back to $5 million prior to 2026.

Impact of a Drop in Federal Exemption? For high net worth clients with assets in excess of the current Federal Exemption, the proposed reduction, could result in an increased estate tax liability at death of $2 million per spouse (or $4 million per couple).

How are High Net Worth Clients Planning? Many clients are considering gifting to fully utilize their increased Federal Exemption before it drops in 2026 (or earlier). To gift an asset outside of your estate, you must give up control and the right to benefit from a gifted asset. The Treasury has issued regulations that any gift completed prior to the “sunset” of the Federal Exemption will not be “clawed back” into the estate.

 Opportunities for gifting include:

  • Outright to children, grandchildren or other beneficiaries – often not advised for substantial gifts due to creditor concerns and future estate tax considerations.
  • In trust for children, grandchildren or other beneficiaries – which can be helpful to control use of funds for a minor or spendthrift beneficiary. Oftentimes lifetime/dynasty trusts (as opposed to trusts that provide for a mandatory distribution of assets when a beneficiary reaches a certain age) are used to preserve creditor protection and estate tax efficiency.
  • Spousal Lifetime Access Trust (SLAT) for the benefit of your spouse for lifetime – which helps to maintain access and control over the gifted funds through a spouse. Both spouses can create and fund SLATs for the other spouse if the trusts are drafted properly to avoid the Reciprocal Trust Doctrine.
  • Grantor Retained Annuity Trusts (GRAT) – A GRAT is a trust to which the Grantor transfers property and from which the Grantor receives an annuity payment each year for a term of years. The retained annuity payment has the effect of reducing the value of any gifted asset.

Intentionally Defective Grantor Trusts (“Grantor Trusts”) – often when lifetime gifts are made in trust, they are made to Grantor Trusts. Assets gifted to a Grantor Trust are removed from the Grantor’s estate for estate tax purposes, yet still part of the Grantor’s estate for income tax purposes. All income generated by the trust will continue to be taxed back to the Grantor. The Grantor could be reimbursed from the trust for this tax liability or alternatively could pay the tax on behalf of the trust which has the effect of an indirect gift (without any additional gift tax consequence). In addition, Grantor Trusts allow a Grantor to sell an asset to the Grantor Trust without recognition of gain/loss.

How Much to Gift? – As mentioned above, to fully utilize the heightened Federal Exemption to its fullest, the entire $11.58 million exemption would need to be gifted. A gift for less than the full Federal Exemption will reduce your remaining Federal Exemption following any sunset. Therefore, if you gift $1 million before the end of 2020 and the Federal Exemption drops to $5 million in 2021, your remaining Federal Exemption at that time will be $4 million. To avoid Buyer’s Remorse, flexibility in the gifting strategy should be considered. In addition to the Federal Exemption, each spouse is currently permitted to gift $15,000 per person per year, without any reduction of the Federal Exemption.

Which Assets to Gift? – Ideally, there are three factors that make an asset a target for gifting, including (1) the ability to devalue the “fair market value” of the asset due to a low appraisal and/or valuation which incorporates discounts for lack of marketability and lack of control on a business valuation, (2) an asset that is likely to appreciate in value in the future, and (3) an asset that is cash flowing.

How to Prepare?

  • Prepare a detailed financial statement with asset information, ownership titling and estimated value to determine the need for gifting;
  • Schedule a meeting with your estate planning professional at Bagley Rhody to review your financial statement and goals for planning;
  • Formulate a gifting plan and begin drafting Irrevocable Trusts, as needed;
  • Obtain appraisals/business valuations for identified gifting targets; and
  • Finalize execution of gifting transaction and file Form 709 Gift Tax Return.

* The above is not legal advice and a personalized review is necessary to determine the exact impact of the Federal Estate/Gift Tax on your estate.

COVID Relief Packages (Federal And Maryland)

The coronavirus (“COVID-19”) pandemic has raised concerns and wide-ranging issues for many small businesses which continue to impact day-to-day operations and will likely persist for the foreseeable future. During this unprecedented time, Bagley & Rhody, P.C. remains ready, willing, and able to serve our clients and community. Our attorneys continue to closely monitor the legal implications for businesses and individuals in responding to COVID-19.  In an ongoing effort to address the many issues created by COVID-19, we have compiled the below summary of various relief programs that have been enacted at both the federal and state levels which are likely to have a significant impact on our small business clients:


The CARES Act – The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) recently signed by President Trump allocates $350 billion to help small businesses in response to the coronavirus pandemic.  Section 1102 of the CARES Act creates the “Paycheck Protection Program” under the Small Business Administration’s current business loan program wherein qualified employers can obtain forgivable loans of up to $10 million to pay for business expenses including payroll, mortgage interest expenses, rent expenses, and utility expenses.  Subject to certain conditions, loans issued under the PPP may be forgiven up to 100% and essentially converted into a grant.  Please note that all applications for relief under the PPP must be completed by a qualified lender and that B&R has the relationships in place to help coordinate and expedite the filing of said applications.  Additional information regarding the CARES Act is available here.

The FFCRA – The Families First Coronavirus Response Act (the “FFCRA”) has been enacted to expand paid leave for covered employees and to create corresponding tax credits for employers via the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act.  These two Acts can be summarized as follows:

  •  Emergency Paid Sick Leave Act (“EPSL Act”) – The EPSL Act requires covered employers to provide up to 80 hours paid leave at the employee’s regular rate of pay (up to $511.00 per day and $5,110.00 total) for all full time employees who are unable to work (or telework) because the employee is ill or subject to a quarantine or isolation order related to COVID-19, or is caring for a child under the age of 18 because the child’s school or place of care has been closed.  Part-time employees are eligible for leave equal to the number of hours that the employee works, on average, over a two-week period.
  •  Emergency Family and Medical Leave Expansion Act (“FMLA Expansion Act”) – The FFCRA expands the FMLA leave to now apply to employees who have been employed for at least 30 days at employers with less than 500 employees and who are unable to work because they are needed to care for a son or daughter under the age of 18 as a result of school or daycare closures.  The first 10 days of the 12-week job-protected leave is unpaid, though subsequent leave must be paid at a rate of two-thirds of the employee’s regular rate of pay, capped at $200 per day or $10,000.00 total per employee.

These provisions are to become effective on April 1, 2020, and will apply to leave taken between April 1, 2020 and December 31, 2020.  Additional information regarding the ESPL Act and the FMLA Expansion Act is available here.



MD Emergency Relief Loans – The State of Maryland has allocated $75 million towards the creation of a loan fund to offer qualifying small businesses who have suffered financial stress or disrupted operations as a result of COVID-19 loans of up to $50,000.00 (not to exceed three months of cash operating expenses) with no interest or principal payments due for the first 12 months.  The loan then coverts to a 36-month term loan of principal and interest payments, with an interest rate at 2% per annum.  Additional information regarding the loan fund is available here.

MD Emergency Relief Grants – The State of Maryland has created a $50 million grant fund to offer working grants of up to $10,000.00 to qualifying small businesses who can demonstrate financial stress or disrupted operations as a result of COVID-19.  Additional information regarding the grant fund is available here.

MD Manufacturing Incentive Program – The State of Maryland has established a $5 million incentive program offering qualifying businesses grants of up to $100,000.00 to manufacture personal protective equipment (“PPE”) that are urgently needed by Maryland hospitals, health care facilities, and emergency and first responders.  Additional information regarding the incentive program is available here.

In the event your business has been negatively impacted by COVID-19, it is imperative that you act quickly to take advantage of the relevant relief program(s) while the allocated funds remain. In addition, if your business is struggling to pay rent, mortgage, loan, utilities or other expenses timely, please contact us for assistance. If you would like to discuss these programs and potentially determine which , if any, program(s) could be utilized by your business, please do not hesitate to contact our attorneys,  Nicholas Crivella or Jon Watson at your earliest convenience.  We remain committed to assisting you and your business during this difficult time.

Transitioning Times

It is often said that you must be appreciative of your past before looking forward to your future. We are grateful for those around us, appreciative of what we have accomplished, and hopeful for what we will become.

First and foremost, we are immensely thankful for the strong foundation laid for the firm by Charlie Bagley and John Rhody. Today we are honored to announce that after almost 40 years in practice, and almost 25 years after founding the firm, Charlie Bagley will be transitioning to Of Counsel. He will still assist with firm matters, maintain a select group of clients, and be available on a limited basis to meet with clients. Join us in congratulating Charlie by sending him a note or email, or in person the next time you see him.

In anticipation of Charlie’s semi-retirement, the firm has transitioned management and ownership to Nicholas Crivella and Matthew Ballard. Nick will serve as the firm’s managing stockholder in charge of firm operation and will continue to lead the estate planning and business practice teams for the firm. Matt will continue to lead the estate/ trust litigation and administration practice teams for the firm.

We are also long overdue in formally announcing the hiring of our four associates, one for each of our firm’s practice areas. Many of you already know them, but we are excited to re-introduce:

  •  Jon F. Watson, Esquire – business operations, mergers and acquisitions and succession planning
  • Alicia M. Balanesi, Esquire – estate/trust litigation
  • Brittney A. Grizzanti, Esquire – estate planning
  • Victoria Lucido, Esquire – estate/trust administration

To further support our dedication to our clients, we have also made strategic affiliations with Michael Roblyer and David Katz who have helped to further bolster the firm’s core practice areas and to expand the scope of our commercial real estate practice to include full scope representation for commercial leasing and sale transactions.

Looking to the future, we have some very exciting changes in the works. In the coming months we will be moving to 1788 Forest Drive, Annapolis, Maryland, our own stand-alone office building. We believe this change speaks to the dedication we have had to serving our clients over the years and the growth we have seen as a result.

With all of the changes to our physical surroundings noted above, we thought it was time to update our branding and website as well. You will note the incorporation of the “knot” as part of our logo signifying our goal of providing security in your business and family planning needs, and of finding solutions for each of our client’s unique issues. This may be a new look, but the same team you have gotten to know over the years remains ready to assist you.

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COVID-19 Office Procedures

During this time of uncertainty, we understand that you are concerned with how the current events impact each area of your business and personal life.  We want to ensure you that we have taken necessary precautions to ensure the health and safety of our employees, their families, and our clients and friends.  And of equal importance, we also want you to know that we remain operational and continue to work hard to address your estate and business legal needs.

At this time, we have enacted the following policies and procedures to address the situation:

  1. Employees –Thanks to several significant technological expansions within our firm, all the firm’s employees are fully connected and active with several working in-office and several remotely teleworking.  We will continue to monitor the situation, and if required, all employees will telework from home maintaining the above operational procedures.
  2. Client Interaction – We will limit in-person meetings in favor of teleconference and video conference options, except for emergency situations, only.  If you have a meeting scheduled within the next couple of weeks and you have not already heard from us, you will be receiving a phone call or email soon to determine your preference for a teleconference call, video conference call or re-scheduling of your meeting to a later date.  We continue to work on all current engagements and plan to meet any agreed upon timelines.  We continue to accept new clients.

For our litigation and estate administration clients, many Register of Wills offices and Orphans’ Courts have closed, and others only have a handful of essential personnel in their office.  All Maryland Courts are likewise short staffed with essential personnel only, and are only hearing emergency matters.  Although we are able to still file in the Circuit Court via e-filing for most counties.  For those other counties and for all Registers of Wills/Orphans’ Courts where physical filings must be mailed, we anticipate significant delays.  Any hearings scheduled in the next 2-3 weeks will be impacted and delayed, and we do not yet know the impact on future dates once the courts are back up and fully running.  We will continue to update you as to the status of matters, as we learn additional information.

Like most of you, we are actively monitoring the situation and will continue to update you should there be any substantive changes to the above.  Please do not hesitate to contact us if you have any questions or if you require assistance in any estate and/or business-related matters.

Be smart, enjoy time with family, and we hope you remain safe and healthy.

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How does the SECURE Act affect your Estate Plan?


Congress recently enacted legislation that will expedite Required Minimum Distributions that
must be paid from inherited retirement accounts which will accelerate income tax liability. Additionally, if inherited retirement accounts are payable to a trust for the benefit of a beneficiary, this new legislation can cause unplanned outright distributions of trust assets to such beneficiaries. Please read below for a more detailed explanation of how your estate plan may be impacted.


In December 2019, Congress passed the Setting Every Community Up for Retirement Enhancement Act (“SECURE Act”). This new legislation made several key changes to how retirement accounts can be distributed to an account owner’s beneficiaries upon their passing. The most significant change relates to Required Minimum Distributions.

Traditional retirement accounts (IRAs, 401(k)s, etc.) are funded with pre-tax dollars, allowed to grow tax free and subject to income tax only upon withdrawal. The longer you are able to defer withdrawing assets from a traditional retirement account, the longer you can defer the income tax liability. Traditionally, the deferral of income was allowed until age 70 1⁄2, at which time the account owner was required to start taking mandatory withdrawals from the account, creating an income tax liability on the withdrawn funds (“Requirement Minimum Distributions” or “RMDs”). Under the new SECURE Act, the required start date for RMDs has been extended from 70 1⁄2 to 72 years of age.

RMDs are relevant in estate planning as clients name individual beneficiaries (i.e. family and/ or friends) to receive their retirement accounts upon their passing. Generally, upon passing a named beneficiary will receive the account as an Inherited IRA.

Prior to the SECURE Act, most beneficiaries of an Inherited IRA were required to immediately begin taking RMDs out of the account and begin paying income tax. The amount to be withdrawn was based
on the beneficiary’s life expectancy, which could significantly delay income tax recognition, especially for younger beneficiaries (“Stretch”). With minor exceptions, the ability for most beneficiaries to Stretch RMDs

from an Inherited IRA based on their life expectancy was taken away under the SECURE Act in favor of a mandatory 10-year term to withdraw all assets from the retirement account.

For clients with a desire to distribute assets to their beneficiaries outright, the new SECURE Act means that the beneficiary will need to pay income tax on any Inherited IRA sooner than they would have prior to the SECURE Act (within 10 years of the original account owner’s date of death). Although this will create a greater income tax liability earlier, if your plan is to distribute retirement accounts outright, then there is likely no change needed to your estate planning documents. Clients are encouraged to seek advice from their financial and accounting professionals related to additional planning alternatives to reduce the burden of this expedited income tax liability (including the potential conversion of traditional retirement accounts to Roth accounts).

Alternatively, many of our estate planning clients choose to retain assets in trust for a beneficiary
as opposed to giving an outright distribution (i.e. for a minor beneficiary, for estate tax purposes, for spendthrift concerns, creditor protection, etc.). Prior to the SECURE Act, in order to maintain the benefit of a Stretch for a retirement account payable to a trust, the trust agreement had to be drafted as a “Conduit Trust”. When a Conduit Trust is the beneficiary of a retirement account, it requires the payment of all RMDs to be paid immediately to the individual beneficiary, outright. This outright payment of RMDs allowed the IRA to “look through” the trust and use the life expectancy of the individual beneficiary in determining the RMDs, thus ensuring the ability to Stretch the Inherited IRA over their lifetime.

However, now with the ability to Stretch taken away for most beneficiaries in favor of a 10-year payout requirement, this means that all retirement assets held within a Conduit Trust will be distributed outright to a trust beneficiary within 10 years of the client’s death. For these client’s with trusts named as beneficiaries of their traditional retirement accounts, the SECURE Act may require a review and possible update to your estate planning documents. Specifically, client’s may choose to revise their planning to remove the Conduit Trust language in favor of a trust that accumulates all RMDs and distributes pursuant to trustee discretion (“Accumulation Trust”).

Unfortunately, the Accumulation Trust is not without its downside. Specifically, any retained RMDs not paid outright to a beneficiary will be taxed at trust income rates which are typically much higher than a beneficiary’s individual rates (i.e. 37% on all income over $12,750). The shift in planning from a Conduit Trust to an Accumulation Trust will not defer or reduce income tax liability on retirement accounts. It will, however, ensure that all IRA proceeds remain in trust as opposed to being distributed outright to a trust beneficiary before otherwise intended.

Please note, under the SECURE Act certain categories of beneficiaries (“Eligible Designated Beneficiaries”) are still allowed to Stretch their RMDs. These categories include:

  • (i)  A surviving spouse can continue to rollover the IRA to their own IRA or Stretch the Inherited IRA over their life expectancy.
  • (ii)  An account owner’s minor child can Stretch based on their life expectancy until they reach age of majority (or up 26 if still in school) with a 10-year payout thereafter (please note this exception only counts if the minor is the specific account owner’s child).
  • (iii)  A beneficiary who is disabled or chronically ill can Stretch over their life expectancy.
  • (iv)  A beneficiary who is not more than 10 years younger than the account owner can Stretch
    over their life expectancy.
  • (v)  A beneficiary who has received an Inherited IRA prior to December 31, 2019.

For these Eligible Designated Beneficiaries, the use of a Conduit Trust in your estate planning still likely remains appropriate.

As with all estate planning, there is no one-size fits all solution. We are committed to helping our clients work through the impact of this new law. If you would like to schedule a one-on-one review of your estate planning documents to discuss the potential impact of the SECURE Act, please contact our office to coordinate a time to speak and/or meet with one of our attorneys. Depending upon demand, our firm may conduct a seminar on this topic. If you would be interested in attending any future seminar tailored to the SECURE Act please email

* The above is not legal advice and a personalized review is necessary to determine the exact impact of the SECURE Act on your planning.

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