A $300,000 inherited house arrives tax-free via the step-up in basis, while a $300,000 traditional IRA can cost heirs $72,000 or more in federal taxes.
Directing IRAs to lower-bracket heirs or charities and step-up assets to high earners can preserve tens of thousands without changing the dollar split.
Beneficiary designations on IRAs override any will, so a stale form naming an ex-spouse can silently redirect the entire account.
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Two heirs, two $300,000 assets, two very different tax bills. The house arrives clean, but the IRA arrives with the IRS as a silent co-beneficiary.