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 New Hampshire, as in all states, a Roth IRA is a retirement savings account that allows for tax-free distributions under certain conditions. Contributions to a Roth IRA are made with after-tax dollars, meaning the money has already been subject to income tax. To withdraw earnings tax-free, the account holder must be at least 59 ½ years old and the account must have been open for at least five years. Unlike traditional IRAs, Roth IRAs do not require minimum distributions during the lifetime of the original owner, allowing the assets to potentially grow tax-free for a longer period. Upon the death of the account owner, beneficiaries can inherit the Roth IRA and may be able to take distributions tax-free. However, the rules for inheritance and distributions to beneficiaries can be complex, especially when trusts are involved. It is advisable for Roth IRA owners in New Hampshire to consult with an attorney or financial advisor who is knowledgeable about the latest federal tax laws and estate planning strategies to ensure that their Roth IRA is passed on to their heirs in the most tax-efficient manner possible.