The recent changes to the tax code requiring many non-spouse beneficiaries to drain an inherited Roth IRA within 10 years does make the choice between passing to beneficiaries Roth IRAs or highly appreciated stock more difficult since the tax-free growth potential of the Roth IRA is more limited than before. Still, for someone under age 59½, it seems that one might usually still have enough time for tax-free growth in the Roth IRA to more than make up for the tax hit that would otherwise be avoided by passing along highly-appreciated stock with a stepped-up basis. It might take some clever modeling to determine what produces the largest after-tax inheritance, if that's your goal. Of course It would be nice to pass along both the Roth IRAs and highly appreciated stock, if that's practical. But if you expect to end up spending a majority of your savings before you die, leaving the Roth IRA until last probably makes the most sense since you'll end up with tax-free growth instead of capital-gains-taxable growth in the interim.
