Roth beneficiary

[Guest Highground]

I have 5 Roth IRA's in a ladder system. I will only take the interest generated yearly if needed.

If I leave the Roth's to my child or grandchild, can they add to them as if they were the original owner and still take the interest tax free?

[John G]

To "leave" a Roth to a grandchild, you must designate them as a "beneficiary" of the account. Funds passed out to a beneficiary just as they would eventually pass out to you - tax free. Check your beneficiary (primary and secondary) designations with your Roth custodian.

NO, they can not add to what was your account, but they can start their own Roth IRA if they have earned income and otherwise qualify.

Are you sure that you have Roths? I am wondering from the language you used - 5 ladders - probably refers to some kind of bonds or CDs in a single Roth. There is no reason that I can think of to have five different Roths as everything (investments, ladders, beneficiaries) can be done with a single Roth.

[John G]

Sunpharee.... "heard" is not a sufficient basis to provide advice about trusts and one size solutions do not fit all problems. I have deleted your post as moderator because I don't think it addresses the issues raised in this thread.

A Roth owner can pass these assets using the beneficiary designation on the IRA application form, both in terms of primary and secondary.

IF.... the assets are considerable, minors may be involved, any family members lack the capacity to handle their own affairs, or the assets are considerable (triggering estate taxes would be one threshold)... then seeking local advice of a lawyer specializing in trusts may be desireable. Trusts are definitely not a do-it-yourself activity.