One major component of estate planning is not only making sure that appropriate documents are in place to maximize estate tax savings, but also ensuring all of the taxpayer’s assets are coordinated with the estate plan.
While traditional IRAs commonly are an integral part of a client’s estate—thereby necessitating a working knowledge of the traditional IRA rules—Roth IRAs typically have fallen below the radar because most taxpayers who take the time and incur the expense of estate planning do not own Roth IRAs in their estates due to the relatively low income limits required to establish them. However, beginning Jan. 1, 2010, this changes as new rules take effect, permitting taxpayers to convert their traditional IRAs to Roth IRAs without any income limitations. In this article, we will review Roth IRAs, in general, and summarize the new conversion rules.
