|
Q.If I leave my Roth IRA to my Spouse and Kids, Can the Roth Grow Tax Free During The Kids Lives?
A.Yes. Roth IRA’s do not have a mandatory annual distribution. In addition, so long as the Roth has been in place for at least 5 years, your beneficiaries will not owe any federal income tax on your Roth IRA after your death. Moreover, by converting a Traditional IRA to a Roth IRA (and paying the taxes now) you will effectively reduce your taxable estate by the amount of the tax bill on your Roth conversion. If you are at least 59 ½ years of age, you can use your IRA assets to pay the tax, penalty-free. Or you can pay the tax from your other assets, preserving the value of your IRA.).
When the owner of a Roth IRA passes away, the Roth IRA is treated like any other IRA. If the Roth IRA has a spouse as a named beneficiary, the spouse can treat the Roth IRA as his or her own and no minimum withdrawals will be required as long as the spouse lives. If the named beneficiary is your child(ren) or friend(s), minimum distributions will be required based on the value of the Roth IRA and the beneficiaries life expectancies.
IRS Circular 230 Disclosure: As required by U.S. Treasury Regulations, you are hereby advised that any written tax advice contained on this web site is not written or intended to be used (and cannot be used) by any taxpayer for the purpose of avoiding penalties that may be imposed on a taxpayer under the U.S. Internal Revenue Service.
|
|
