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September 05, 2011
Even though an inherited Roth IRA is subject to tax levies when transferred to beneficiaries, it can be a smart approach for keeping financial assets out of probate. Account holders pay taxes when they make deposits into the IRA, but fund might be subjected to estate tax if they exceed allowable exemptions.
When heirs acquire an inherited Roth IRA it's best to retain the services of a tax accountant. Rules surrounding estate tax has changed over the past three years, with additional changes planned for 2012.