Focus on Finance
VILLAGE BEAT (Continued from page 12)
by Christopher Gallo
A pedestrian bridge will be built to join the adjacent parcel to the campus
Since graduating from UCSB in 1992, Christopher has worked with local individuals and families as a financial planner. He is a Vice President with UBS Financial and holds the CFP, CIMA, and CPWA credentials. He can be reached at christopher.t.gallo@ubs.com or 805-730-3425.
Retirement Plan Changes
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new Federal law passed in December has made sweeping changes to the retirement plans used by most Americans. The SECURE (Setting Up Every Community for Retirement Enhancement) Act brings with it many benefits, including pushing back the mandatory retirement distribution age for IRAs, but the cost is the removal of the popular “stretch IRA” provision for distributions. First, the benefits of the new SECURE Act. Previous IRA rules required owners to begin distribution during the year they turned age 70 ½, essentially turning on the income spigot and taxing this income. The new Act pushed the required age of distribution to 72, giving you a few more years of tax-deferred accumulation. In another positive move, there was previously a maximum age of 70 ½ to contribute into your IRA – this has been removed and there is no longer an age limit for which to put contribute to an IRA so long as you have earned income. There are variety of other positives for retirement plans, but one other significant change is to 529 plans, the popular tax-deferred education savings accounts. Alongside qualified distributions for college expenses, which were always tax free, and private school costs up to $10,000 each year, which were made tax free a few years ago, the Act adds
a few more tax-exempt distributions: $10,000 each year for qualified student loan repayments, costs of a religious school, and costs for a registered apprenticeship. One positive recent piece of legislation that was not changed was the recently permanent law allowing up to $100,000 per year from an IRA to be distributed to a qualified charity without paying taxes. On the other side, many IRA owners with large balances who had planned to bequeath these assets to their children are losing a key feature – the so-called “stretch IRA” provision. Simply put any non-spouse beneficiary of an IRA was previously allowed to stretch distributions over their lifetime, allowing younger beneficiaries to have the assets grow tax deferred and keep mandatory distributions and taxes low. This rule has been changed to mandate a maximum 10-year distribution period to beneficiaries (that are not a spouse) and popular IRA trusts. This may mean re-working previous estate plans and perhaps incorporating life insurance trusts, the use of charitable remainder trusts and conversion to Roth IRAs in order to minimize the costs of this new Act. I encourage you to discuss these changes and how they may affect you with your advisors, estate planning attorney and CPA before making any changes. •MJ
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16 MONTECITO JOURNAL
project, a gala is planned for March 7 at the Montecito Club. If you have ideas for the property, and how students can best explore and discover in nature, you are invited to email Dr. Ranii at aranii@montecitou.org. For more about MUS, visit www. montecitou.org.
New Fire Code
Reps from the Montecito Fire Protection District were in front of Montecito Planning Commission last week outlining recent amendments to the District’s Fire Code. Fire Marshal & Battalion Chief Aaron Briner outlined the changes, which include changes to access road width and design, fire sprinklers requirements, emergency power systems, and more. Every three years, the California Fire Code is amended and adopted. The 2016 California Fire Code was superseded by the 2019 version and became State law on January 1, 2020. On December 23, 2019, the Montecito Fire Protection District Board of Directors formally adopted Ordinance 2019-02, making amendments to the California Fire Code, California Residential Code, and California Building Code creating the Montecito Fire Protection District Fire Code. Briner explained that it was a collaborative effort between fire prevention officers of Montecito, Santa Barbara County, Santa Barbara City, and Carpinteria-Summerland, who met and attempted to determine where agency amendments could be standardized. “The goal behind the 2019 amendments for Montecito was simplification, consistency, and collaboration with surrounding agencies,” he said. There were 17 amendments to the Montecito Fire Code, with four being the most significant. Road access requirements were amended to account for more dwelling units on parcels, which increase the number of lives that would need to be saved in an emergency. Fire access roads are required to be 14-feet wide for a single parcel or dwelling unit, and 16-feet wide for two to four parcels or dwelling units, among other requirements. Fire sprinklers are required for new
“Music is a language that doesn’t speak in particular words.” – Keith Richards
homes, while alterations and additions to homes are more complicated situations, Briner said. The new code simplifies the calculation in which sprinklers are required; if the home is altered 50% or more of the existing gross square footage, or the addition causes the home to reach 1500 sq. ft., the home will require sprinklers. Briner also discussed emergency and standby power systems, as many homeowners are opting for battery backups versus generators. “This is an area that we are going to continue to keep an eye on over the year to continue to make changes,” he said. Lastly, Briner explained the new code has stronger language related to explosives and fireworks: all are prohibited within the District. As part of the revised code, MFPD created development standards to help planners, architects, and homeowners in understanding and applying the code. Those standards, which outline roofing assembly, vegetation management (defensible space), fire department access, water supply, water storage, fire sprinklers for residential and commercial, and post disaster rebuilds, are available on the District’s website. “We were able to simplify our code and make it more consistent with surrounding agencies, ensuring that the residents of Montecito have a code that best serves the community.” Briner said. Also happening at the District: earlier this month MFPD launched an interactive Story Map to highlight the Department’s Wildland Fire Prevention Program. Story Maps combine text, images, multimedia, and interactive maps to create an engaging online experience. This new Story Map provides a unique opportunity to exhibit the importance of the Montecito Fire Department’s numerous wildfire mitigation projects and give a voice to the programs that continue to strengthen our community’s resilience to wildfire. The Story Map, as well as the new fire code ordinance and development standards, are available on the District’s website at www.montecito fire.com. •MJ 27 February – 5 March 2020
