In recent years it has become more common for people to inherit the balance of a retirement account. Clients are increasingly looking for information on what they can do with these inherited funds to maximize their future tax savings potential. The rules governing the rolling over of inherited retirement funds into an inherited Roth IRA can be complicated. This tax-savings technique can often be used if the designated beneficiary is the original account holder’s spouse. This column discusses some of the pros and cons of converting to an inherited Roth. Understanding these complex rules is important for avoiding unpleasant surprises, so people should consult with an estate planning professional for more information.
See Robert Bloink and William H. Byrnes, The inherited Roth rollover: How to avoid unpleasant surprises, Life Health Pro, November 23, 2015.
Special thanks to Jim Hillhouse for bringing this article to my attention.
