Choice of Beneficiary

• The ability to choose the beneficiary of your Roth account allows for estate planning flexibility. One strategy to lengthen the life of your Roth IRA assets is to name your spouse as the first beneficiary and have her select a young beneficiary as her own. As your spouse can treat the inherited IRA as her own, she is not required to begin taking distributions until she turns 70 1/2. Upon her passing, her young beneficiary will have to take required distributions from the Roth, but only on the basis of their own life expectancy, which may be 30 years or more. This maximizes the amount of time that your Roth IRA is allowed to grow, thus passing the maximum possible estate to your heirs.
  
  

Contributions For Life

• Unlike with traditional IRA accounts, you are not required to cease Roth IRA contributions once you reach the age of 70 1/2. In fact, the IRS lets you continue contributing to your Roth until you die. If you survive even 5 years beyond 70 1/2, that is an additional 5 years of contributions you have to increase the value of your estate for your heirs.
  
  

No Required Minimum Distributions

• Just as there is no age limit on Roth contributions, there is no mandatory required distributions from a Roth IRA, either. As you will not be depleting your account as you pass the age of 70 1/2, this is a big advantage that Roth IRAs have in terms of increasing the value of your estate.
  
  

No Income Tax Liability For Heirs

• Since a Roth IRA is funded with after-tax dollars, distributions from the account are tax-free, even to your heirs. This is another huge advantage that Roth IRAs have over traditional IRAs, which are fully taxable upon distribution, whether to yourself or to your heirs.
  
  

Better Visibility of Inheritance

• If you are planning to leave a specified sum to your heirs, the Roth IRA can be helpful because the Roth will pass to your heirs tax-free. With a traditional IRA, your heirs will have to pay income tax, and the amount of the tax in future years can be unpredictable and may also vary depending on how rapidly they withdraw the funds. For example, your heirs may now be in a 10 percent tax bracket, but that may jump to 20 percent or more, and if they withdraw from an inherited traditional IRA all at once, they may be pushed into an even higher tax bracket. With a Roth IRA, as the funds pass tax-free, it doesn't matter what tax bracket your heirs are in. You know that they will receive the full amount of your bequest.