• Skip to primary navigation
  • Skip to main content

Ready for Retirement

  • Home
  • Podcast
  • About
  • Submit Your Question
  • Work With Me
  • Show Search
Hide Search

How Do Roth Conversions Impact Inheritance/Legacy?

James · April 5, 2022 · Leave a Comment

Subscribe now

Questions answered: What are the implications of inheriting an IRA? Should you use a CRUT? How do different assets affect inheritance?

We’re on YouTube!

Check us out here for more content to help you create a secure retirement: YouTube – Root Financial Partners

Key Takeaways:

  • Understand your priorities.
  • Inherited IRAs:
    • When you turn 72:
      • You have a required minimum distribution.
        • If you have money in a pre-tax account, you are required to take out a minimum amount each year.
    • If you inherit an IRA:
      • You have a 10 year rule.
        • You don’t have to take out a specific yearly amount.
        • You have until December 31st in the year of the 10th anniversary of the account owner’s death to fully distribute the account.
          • The exceptions: you are a surviving spouse, you’re disabled or chronically ill, you’re a child under the age of majority, or you’re fewer than 10 years younger than the account owner.
        • This applies to both traditional and Roth IRAs.
  • The legacy impact of different assets.
    • Brokerage assets are tax-free on the date that it’s inherited.
  • Charitable Remainder Unit Trust.
    • Give a gift to the CRUT, the CRUT pays an income amount to a beneficiary, when the beneficiary is no longer alive, the remaining amount goes to a charity.
      • In some circumstances, you could name the CRUT as the beneficiary of your IRA, and your child as the income beneficiary of the CRUT.
    • You don’t want the beneficiary to be too old or too young.
    • This makes sense if the beneficiary is in a high tax bracket.
    • You need to expect long-term returns inside the CRUT.
    • You need to be charitably inclined.

Episode Timeline:

[05:33] Understand your priorities.

[12:01] The legacy impact of different assets.

[21:00] CRUT.

Connect with us:

Subscribe to our YouTube channel: www.youtube.com/c/RootFinancialPartners

Visit our website:  www.rootfinancialpartners.com

Follow us on Instagram: www.instagram.com/rootfinancialpartners

Connect with us on Facebook: www.facebook.com/rootfinancialpartners

Resources:

Submit your question

Subscribe to the show

Work with James

Podcasts financial planning, Individual retirement account, inheritance, legacy planning, roth conversions, Tax implications

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Copyright © 2023 · Ready for Retirement