A Roth IRA is an individual retirement account (IRA) that is funded with money on which income taxes have been paid—but distributions may be taken without paying income tax (tax free) if certain conditions are met—for example if you are at least 59 ½ years old when you begin taking distributions and have had a Roth IRA account for at least five years.

There are no required minimum distributions (RMDs) in the original Roth IRA account owner’s lifetime. And the original Roth IRA account owner can provide their heirs with years of tax-free income (distributions) by properly designating a beneficiary or using the proper trust (a conduit trust) that takes out the required minimum distributions each year.

Because of the complexity, pitfalls, and laws that are constantly evolving, a Roth IRA account owner who wants to leave this asset to heirs should consult with a legal or financial professional who is familiar with the rules.

In Louisiana (LA), as in all states, Roth IRAs are governed by federal law, not state law. The key features of a Roth IRA include contributions with after-tax dollars and the ability for tax-free distributions under certain conditions, such as the account holder being at least 59 1/2 years old and having held the account for a minimum of five years. Unlike traditional IRAs, Roth IRAs do not require minimum distributions during the lifetime of the original account owner. This allows for the potential of tax-free income to beneficiaries, who can inherit the Roth IRA. However, beneficiaries are subject to certain distribution rules, which can be managed through proper beneficiary designations or by using a conduit trust to ensure RMDs are taken. Due to the intricacies of estate planning and tax laws, which are subject to change, it is advisable for Roth IRA owners in Louisiana to consult with an attorney or financial advisor who is knowledgeable about the current regulations to ensure their estate planning goals are met and to maximize the benefits of a Roth IRA for their heirs.