The Downsides Of Inheriting A Roth IRA

Conventional wisdom holds that inheriting a Roth IRA is better than inheriting a traditional IRA because people receive distributions from Roth IRAs tax-free. This article discusses the importance of remembering the taxes that are paid upfront when converting a traditional IRA into a Roth IRA. People will need to consider their own circumstances when deciding whether to make the conversion of a traditional IRA into a Roth IRA before passing the assets down to heirs. This column provides a good list of basic rules of thumb that people should follow when making the decision on whether to convert from traditional into Roth. It is a good idea to speak with an experienced estate planner to receive more personalized advice on these types of issues.

See Robert Powell, Inheriting a Roth IRA isn’t always the best news, USA Today, January 20, 2016.