Roth Conversion
Learn about Roth conversion and how it may impact your estate planning strategy, taxes, and beneficiaries in the future.
How does a Roth conversion influence estate planning decisions?
A Roth conversion can be a strategic move in estate planning as it involves converting traditional IRA funds into a Roth IRA, potentially simplifying future tax obligations for beneficiaries. The main benefit is that Roth IRAs allow for tax-free withdrawals, which can reduce the tax burden on heirs. This conversion is often considered for smoothing out tax liabilities over time, provided that the grantor pays income tax on the converted amount at the time of conversion. Decisions to proceed with a Roth conversion should consider the implications for taxes, current income needs, and the anticipated future tax scenarios of beneficiaries.
