Your Kids' Tax Brackets Could Lead to Unequal Inheritances

Sometimes, divvying things up equally means one child might end up with less because of tax implications. Here’s how to avoid that.

Two men stand next to each other, one with empty pockets and one with cash in his pocket.
(Image credit: Getty Images)

Estate planning is a critical aspect of comprehensive financial planning, especially when it comes to ensuring your heirs receive the maximum benefit from your legacy. Among the various components of estate planning, the designation of beneficiaries for individual retirement accounts (IRAs) is a particularly nuanced decision with far-reaching tax implications.

The distinction between Roth IRAs and traditional IRAs (or company retirement plans) is crucial to understand when planning for the future of your heirs. Each type of account is subject to different tax rules upon distribution:

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Antwone Harris, MBA, CFP®
Chief Planning Strategist, Platinum Bridge Wealth Strategies

Antwone Harris, MBA, CFP®, is a seasoned financial professional with over 20 years of experience helping clients transition from their main careers to the next phase of their lives. As a former VP-Senior Financial Consultant at Charles Schwab Inc., he managed over $890 million in client assets and ranked in the top 5% of more than 1,100 advisers nationwide. His financial expertise has been featured in major media outlets such as CBS, ABC, NBC, FOX, The Washington Post, Bloomberg, The Financial Times and Kiplinger. Harris is a CERTIFIED FINANCIAL PLANNER™ and a Retirement Income Certified Professional®, focusing his practice on creating comprehensive plans for individuals approaching or already in retirement. Recognizing the anxiety surrounding retirement preparation, Harris founded Platinum Bridge Wealth Strategies to provide specialized financial planning for those nearing or in retirement.