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How Do Roth IRAs Fit into Estate Planning?

Estate planning is so important because you can make a plan to protect your money after you die. When you meet with an expert estate planning team, you will find ways to pass your money to your loved ones while minimizing taxes and fees.

How do Roth IRAs fit into estate planning? Let’s read to learn more.

What Is a Roth IRA?

A Roth IRA is a retirement account with a sum of money that is put away and can grow tax-free. There are no taxes required from the money withdrawn from a Roth IRA. This is because taxes are paid on the money before going into the account.

Many people use Roth IRAs when they are sure the taxes now will be lower than the tax requirements in the future. So how can you use Roth IRAs in your retirement plan?

The Benefits of Roth IRAs

Most retirement accounts have a mandatory annual distribution. With Roth IRAs, you are not required to pull out money each year. Therefore, the money can stay inside the account and appreciate without paying taxes on the gains.

If you assign a Roth IRA to a non-spouse, they will be required to distribute the money and empty the account within 10-years. However, a spouse does not have to adhere to that rule and can pull money from the account at their convenience.

Start today by setting up a Roth IRA as part of your estate plan. Name the beneficiary and use the Roth IRA to ensure that your loved ones will be taken care of after you pass away. The best gift you can give your family is the gift of careful planning of your estate to save your loved ones from confusion and red tape after your death.

Contact a Trusted Lawyer

How can you maximize your tax benefits when estate planning? Meet with our Miles & Hatcher, LLP team to ask any questions you may have about what happens to your money at the end of your life. Then, you can make official plans and feel confident in your estate plan. Call to schedule a free initial meeting: (909) 481-4080.

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