Converting a traditional IRA into a Roth IRA has many advantages and disadvantages, but what many northeastern Pennsylvania families don’t realize is that it can provide some estate planning benefits, announced the Slusser Law Firm.

Although you pay income tax on the value of the IRA immediately if you convert, Hazleton Attorney Christopher B. Slusser said there are five reasons converting your IRA can help with your estate planning.

First, future withdrawals will be tax-free, and there are no minimum required distributions during your lifetime.

Second, if you have enough assets to pay the income tax without dipping into the IRA itself, it makes sense to convert it. Third, if you won’t need to take distributions from the IRA during your lifetime, you can convert to a Roth IRA and leave it to your heirs.

A fourth benefit is that your taxable estate will be reduced by the amount that you pay now in income tax, which is useful if your estate is large enough to be subject to the estate tax. While the federal estate tax now only affects estates of more than $5.43 million, many people are also subject to state estate taxes that kick in at much smaller amounts.

The fifth benefit is that you don’t have to take minimum annual distributions. If you don’t need these distributions, they will merely create unnecessary taxable income for you each year after you turn 70½, with the amount increasing each year. These distributions can push you into a higher tax bracket, reduce your itemized deductions, increase taxes on your Social Security benefits, and cause other problems. Often it’s cheaper in the long run to pay the tax now all at once than to create tax headaches for yourself every single year after you turn 70½.

Estate planning is something every adult in Luzerne, Carbon, Lackawanna and Schuylkill County should seriously consider. Slusser Law Firm’s attorneys have extensive knowledge regarding wills and the estate planning process and can help you avoid potential pitfalls as you make the decisions that are right for you and your family.

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The Slusser Law Firm

1620 N. Church Street, Suite 1
Hazleton, PA 18202
1515 Market St
Suite 4056
Philadelphia, PA 19102
Fill out the above form to contact the Slusser Law Firm. (Please do not submit private or confidential material via the Internet. You may call us at 570-453-0463 to discuss private matters.)


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