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Retiree Leaves $700,000 IRA Untouched, Heirs Face Ten-Year Tax Bill

Original: A Retiree Who Dies at 82 With $700,000 Still in an IRA, Never Having Converted a Dollar, Leaves a Daughter in Her Peak Earning Years Ten Years to Pay Tax on All of It

A retiree died at 82 with $700,000 still in an IRA, having never converted a dollar to a Roth. Under current rules, her daughter, now in her peak earning years, must empty the account within ten years, paying income tax on withdrawals at a time when her own tax rate is high. The case highlights how delaying Roth conversions and leaving large traditional IRAs can push the tax burden onto children during their highest-earning, highest-tax years.

Why now: It illustrates a common estate-planning pitfall affecting retirees and their heirs under the SECURE Act's ten-year rule.

IRASECURE ActRoth conversion

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• A Retiree Who Dies at 82 With $700,000 Still in an IRA, Never Having Converted a Dollar, Leaves a Daughter in Her Peak Earning Years Ten Years to Pay Tax on All of It · 24/7 Wall St.

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