Retirees often worry about outliving their retirement savings, but what happens when your retirement savings outlive you? Most people don't think about it. Maybe that's why Congress is eyeing these funds as a source of increased tax revenue. 

If you don't think the danger is real, consider this: in late May of this year, the SECURE Act passed the U.S. House of Representatives by a rare bipartisan vote of 417-3. The bill is now in the Senate, where some predict it will pass by unanimous consent.

While there are a few goodies in the SECURE Act for retirees – like the ability to delay required minimum distributions (RMDs) until age 72 – the least-discussed part of the SECURE Act is the most interesting to estate planners. 

What would the SECURE Act mean for inherited IRAs and 401(k)s? Here's what you need to know.

The current rules for inherited IRAs and 401(k)s are very complicated. For the most part, the rules require non-spouse beneficiaries to start taking RMDs in the year after they inherit but allows them to stretch withdrawals over their lifetime. Beneficiaries who limit withdrawals to the annual RMD have an impressive opportunity for tax-free growth.

The SECURE Act would change this. Instead of a lifetime of tax-free growth, most beneficiaries would be required to withdraw and pay income taxes on all funds in the inherited retirement plan over a ten-year period.

People with large retirement accounts should keep a close eye on the SECURE Act, especially if they are not married or don't expect a surviving spouse to exhaust the couple's retirement funds. Your estate planning attorney and financial adviser can work together to minimize the risk of increased tax liability.

Although these changes aren't set in stone yet, staying informed on new developments is crucial. Make sure you like our Facebook Page or subscribe to our newsletter to receive updates as new information becomes available about the changes and their effect on your estate plan.