Re: Formerly tax-free

BMS wrote:

> Aren't those distributions just income tax free, however they get tossed
> into the calculations for estate tax and probate?

The Roth IRA would appear to always impact estate tax 
calculations, though there was one commentator who, for a 
while, had a theory about how the right to the Roth could be 
moved out of the estate--though the IRS didn't agree.

Generally, unless no beneficiary is designated or the 
person's estate is designed as the beneficiary of the Roth 
IRA, it wouldn't impact probate issues in most states. 
That's because the Roth IRA generally passes by beneficiary 
designation and not through the probate mechanism.

Life insurance is a more interesting issue--depending on how 
the policy is owned and the rights retained or not retained 
by the insured, it may or may not be included in the estate. 
 For *probate* the issue is basically the same as the Roth 
IRA--if it passes to a designated beneficiary who is not the 
estate, it would pass outside probate.

--
Ed Zollars, CPA
Phoenix, Arizona