Leaving a Tax-Efficient Legacy: How to Pass on Wealth Without a HeavyTax Burden

Legacy planning is about more than leaving assets — it’s about ensuring those assets transfer efficiently and meaningfully. Without proper planning, your heirs could face unexpected taxes, especially under the SECURE Act’s 10-year withdrawal rule for inherited IRAs.

Mary, a widowed mother, left her children a $600,000 IRA and $200,000 in savings. When she passed, her children learned they were required to withdraw the IRA within 10 years, forcing them into higher tax brackets. If Mary had converted portions of her IRA to a Roth or used charitable strategies during her lifetime, her children could have inherited tax-free income and avoided thousands in taxes.

Three Ways to Leave a Tax-Efficient Legacy

• Roth IRAs for Heirs: Converting to Roth during your lifetime allows heirs to inherit tax free growth.

• Life Insurance: Provides a tax-free death benefit and can replace assets given to charity.

• Charitable Legacy: Donor-Advised Funds (DAFs) or Qualified Charitable Distributions (QCDs) reduce current taxes and support causes you care about.

Tax-Smart Estate Planning Tips

• Review beneficiary designations annually — they override your will.

• Consider trusts to manage timing and control of asset distribution.

• Coordinate with your financial, tax, and legal teams for a unified plan.

• Understand how the 10-year rule impacts inherited IRAs and plan accordingly.

With thoughtful planning, you can pass on both wealth and wisdom — minimizing stress for your family and maximizing the impact of your legacy.

About Keystone Tax LLC

Keystone Tax LLC works with families to simplify estate, tax, and retirement planning. Our goal is to protect your legacy, reduce taxes, and ensure your loved ones receive the full benefit of your life’s work. Schedule a consultation at www.keystone-tax.com or call (715) 835-6022.