Craig Wear, CFP®Craig Wear, CFP® | Expert in Roth Conversions & Tax-Efficient Retirement Strategies for IRA Millionaires

Tax FREE growth for your heirs

7 Jan 2025 · 1 min

Watch on YouTube

0:39

A short YouTube video by Craig Wear, CFP® offering an estate-planning tip: Roth IRAs provide tax-free growth for heirs. If a Roth IRA has been open at least five years, inherited distributions are not subject to income tax, so converting (part/all) of a traditional IRA to a Roth can materially reduce heirs' future tax liabilities—especially if they would otherwise be in higher tax brackets.

Questions this video answers

Five years.

January 7, 2025.

Chapters

Number one tax free growth for your heirs. Probably super Captain obvious there. But Roth IRAs grow tax free, and after your passing, your heirs can actually inherit that Roth without paying any income taxes on the distributions as long as the account was open for five years. But this can result in some really some significant savings for your heirs, especially if they end up inheriting the money when they're in higher tax brackets or if the funds put them into a higher tax bracket. So our estate planning strategy tip on this point is that converting part or all of your IRA to a Roth IRA really reduces the tax liabilities that your heirs are going to face.