Insurable Interest Canadian Insurance Blog

But what happens if parents decide that they need the funds for their own retirement? While they can easily change the named beneficiary of the 529 plan account to their own, what implications might that have with respect to the 15-year rule? Would the change of named beneficiary for the 529 account restart the duration clock? That wasn’t Congress’ intention in setting up the rules, Slott and Levine offered, but it’s not completely clear at this point. The same is true with how the $35,000 limit “per beneficiary” would apply in cases where a parent saves a lot more than that amount (or funds multiple 529 plan accounts to the maximum) and decides not to use the money for other people’s education costs. It would seem that an owner of a 529 account that held more than $35,000 in unneeded assets could theoretically change the beneficiary multiple times and then do a series of rollovers out of the 529 plan that would add up to an amount greater than $35,000. It is not clear what Congress’ intent was in setting up this new rollover framework, according to Levine and Slott, and it is possible that lawmakers did not plan to...

Forty-four percent of self-directed clients in the new study strongly agreed that they expect their wealth management firm’s websites and apps to help them meet their financial goals, up from 40% a year ago. Among this group who expect these tools, 30% said they do not strongly agree that their firm is delivering on this expectation. This percentage rises to nearly 80% among those who say they somewhat agree that they are expecting help. When websites and mobile apps meet key criteria for delivering beyond foundational levels, overall satisfaction scores among both full-service and self-directed clients rise substantially, by more than 100 points on a 1,000-point scale. Moving to the top of the hierarchy results in truly differentiated experiences, respondents said. Clients’ perceptions of data security strongly influence overall satisfaction scores, according to the study. Among full-service clients, satisfaction scores are 147 points lower when they have concerns about their personal information being very secure. For self-directed clients with those concerns, scores are 145 points lower. “In a world in which firms are offering no-fee trades and many of the basics of the user experience are similar from one brand to the next, the digital experience hierarchy has increasingly become...

“Expulsion would likely put Alpine out of business, and would do so before the SEC performs a full review of Finra’s decision,” wrote Millett, a Barack Obama appointee. Maranda Fritz, a lawyer for Alpine, said after the ruling that Finra “exercises enormous power over participants in the securities industry while insisting that it need not abide by the Constitution.” Finra said in a statement that it was reviewing the decision. Wall Street Watches The lawsuit has attracted the attention of Wall Street, which is overseen by a number of self-regulatory organizations, or SROs, including stock exchanges and clearinghouses. Those SROs have warned of significant disruptions to the markets if Alpine wins the case. Other groups, including one represented by former Attorney General William Barr, are supporting Alpine’s stance that citizens aren’t guaranteed their constitutional rights under the current structure. U.S. Circuit Judge Justin Walker, a Donald Trump appointee, dissented in part to the opinion, saying Finra should be stopped altogether from wielding enforcement authority. “The problems with Finra’s enforcement proceedings run even deeper,” since it “wields significant executive authority when it investigates, prosecutes, and initially adjudicates allegations against a company required by law to put itself at Finra’s mercy,” he...

The IRS has made clear that no there will be no more waivers for beneficiaries under the 10-year rule — RMDs must be taken in 2025. Even though distributions have not yet been required, the 10-year clock on withdrawing the entire account balance has been ticking. This means that a non-eligible designated beneficiary who inherited an IRA in 2020 must withdraw the entire balance within the next five years. Beyond what a client may be required to take as an RMD for 2025, it might behoove the client to withdraw an amount in excess of the RMD amount in 2024 and beyond to avoid taking a major tax hit in the final year of the 10-year period. Surviving Spouse Beneficiaries Another rule change via Secure 2.0 that took effect in 2024 allows a surviving spouse to be treated as their deceased spouse when taking distributions from the deceased spouse’s retirement accounts. If the surviving spouse elects to take advantage of this rule change, they are eligible for the following benefits: RMDs for the surviving spouse can be delayed until the deceased spouse would have reached their required beginning date to commence their RMDs.  Once RMDs for the deceased spouse would...