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

What is the Estate Plan Tax Trap

29 Apr 2026 · 0 min

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In this segment, Craig Wear, CFP®, explains that many high‑net‑worth individuals assume that once they have a will, trust, and medical powers in place, their estate planning is complete. He argues that for IRA millionaires this creates a dangerous illusion of control because the estate documents do not determine how much of the IRA the heirs will actually retain. The IRS’s tax rules, not the estate plan, dictate the post‑mortem value of the inherited IRA, creating a hidden “tax trap.” Wear emphasizes the critical distinction between merely controlling the distribution of an asset and protecting its value from taxation, urging viewers to look beyond the paperwork and address the tax consequences of inherited IRAs.

You see, most people put together an estate plan and they feel like the hard part is over. They got the will, maybe a trust, medical powers, and everything looks finished. So they stop thinking about it because writing down who gets your money means everything will work out that way, right?
I wish it did, but that's not how it works. I mean, this is where a lot of families get blindsided, right, Dad?
I mean, estate planning for IRA millionaires creates a real false sense of control that doesn't actually address the part that matters the most. And Yeah, it makes it clear where the money goes, who receives it, and make sure everything's intentional. But none of that tells you what actually happens when they inherit your IRA. And that's the part many people never stop to question. Okay. So there's a big difference between controlling an asset and protecting it. Yeah. Because your estate plan doesn't truly decide how much of the large IRA your kids actually get to keep. The IRS does. And that's the tax trap that's hiding inside so many estate plans for IRA millionaires.