Convert to Roth for Estate Purposes

[Guest rayrussell44]

My wife and I both have size-able traditional IRAs. Depending upon what congress does regarding the inheritance tax our combined assets including the IRAs will exceed the minimum. I do not need my IRA, and therefore am considering taking the total as a distribution, and use it to pay the taxes, and then convert that same amount of her IRA to a Roth. I think this will accomplish to goals. It will reduce the size of the estate, and it will allow that amount to grow tax free in the future. Am not sure who to ask for advice. A tax lawyer or accountant.

[J Simmons]

An accountant or tax lawyer might have the skills and experience that you need to perform an analysis of many factors that come into play and to advise you accordingly. However, not every accountant and not every tax lawyer will have those skills and experience.

You might consider searching on the internet for articles on the topic of factors to consider and the advisability of converting to Roth, with estate planning considerations taken into account. Don't try to bone up on the topic yourself by studying such articles. This is not a do-it-yourself matter. Rather, after reading over a number of articles, contact the author of the best and next best articles, in your opinion. Ask them if they have suggestions on who you ought to talk to. Do not worry about dealing with someone in your locale. Telephone, faxes, and e-mail make it easy to deal with someone wherever they are. You are looking for someone with the necessary know how, not just someone with a nice office in your city.

[Guest Rajeev]

I agree with J Simmons on the working with an accountant and attorney, and the locale should not be important but the knowledge, but I would add to that by saying that this activity should be a team effort of accountant, estate planning attorney and financial planner, where any particular team member you choose should not only be knowledgeable about the federal laws/rules, but also your state laws/rules with the same, including any possibility of you moving to another state (my assumption here) in the future, so that the plan can be appropriately executed for you...

[Guest redsands]

To clarify, estate tax and income tax are two different things.

The roth will be put into the calculation of your estate once you and your wife have passed. IF your estate is small enough, no estate tax will be due. This is separate from the Roth being income tax free.

If you have a large estate you really should seek professional advice so planning can be done.

IMO, I don't suggest contacting an author of an Internet article. Most of those people only write articles for a living. They are journalists, not industry professionals. When I read those articles they make my skin crawl...as a seasoned industry professional.

To find an attorney you can search your state bar association for estate planning specialty. To find a financial planner go to the financial planning association. IMO, an accountant can be plugged in from either the attorney or planner's recommendation. Alternatively, find an estate planning member http://www.naepc.org/