Short excerpt from a YouTube video (Craig Wear, CFP®) explaining a strategy to use Roth IRAs for multigenerational, tax-efficient legacy planning—passing Roth assets to children/grandchildren for extended tax-free growth under the (new) ten-year rule. The speaker contrasts Roth inheritances (tax-free withdrawals) with traditional IRA inheritances (taxed as income).
Tip number four kind of asset allocation and legacy planning all at once. So Roth IRAs can be strategically used to pass on tax efficient assets to the next generation. So while beneficiaries of these traditional IRAs got to pay income tax on withdrawals, Roth IRA beneficiaries get to receive those inheritances tax free, which allows them to use full value of that whole inheritance. So the strategy here is for a multigenerational planning approach. You can ensure that Roth IRA assets pass to children or even grandchildren, giving them a much longer horizon of tax free growth. Under this new ten year rule.
