“It’s a great asset to accumulate…

but one of the worst assets to die with…”

That’s how WorthNet Partner Adviser John Parise of Copper Beech Financial Group describes the uncomfortable truth about many retirement accounts.

And another tax season come and gone has a way of reminding investors just how much the IRS eventually touches.

For long-time newsletter readers, that reminder may point to a familiar place:

the retirement accounts they’ve spent years building.

You know how it works. Money goes in tax-deferred… grows for years… and eventually comes out as ordinary income.

That structure works well during retirement. After all, retirement accounts were designed first as accumulation vehicles.

But did you know that’s not the tax man’s final say?

Parise says the real complications tend to show up once that IRA becomes a legacy asset…

“…one of the worst assets to die with…”

Because the tax rules change once that money passes to the next generation.

It used to be that families could pass retirement accounts to their heirs and allow withdrawals to stretch over a lifetime.

But the SECURE Act of 2019 changed that equation.

Today, many non-spouse heirs must withdraw the entire inherited IRA within 10 years.

That can dramatically compress the tax timeline.

And Parise says that’s where the trouble often begins.

Large withdrawals can push heirs into higher tax brackets.

Imagine someone earning $200,000 a year who inherits an IRA.

If they withdraw another $100,000 from that account, their taxable income suddenly jumps to $300,000.

Now that IRA money may be taxed at 32% or even 35%, instead of lower brackets.

There’s another downside.

Under the old rules, that inherited IRA might have continued growing for 30 or 40 more years.

Now the IRS forces the money out in 10 – cutting short decades of tax-deferred compounding.

As Parise puts it:

“Instead of small withdrawals over decades, heirs now have just 10 years to empty the account – often stacking those withdrawals on top of their own income and pushing them into higher tax brackets.”

Which is why Parise says many families eventually start asking a different question:

Is there a better way to position that asset for heirs?

One very specialized approach he described involves taking IRA distributions and repositioning those funds into life insurance structures designed for the next generation.

At the heart of this strategy is that IRA assets are generally pre-tax…

At some point – whether it’s the original owner or the next gen – taxes are going to be paid.

So instead of passing the tax burden forward… some families choose to address it earlier.

In certain cases, that can involve taking distributions from the IRA, paying the taxes due, and then repositioning the remaining proceeds into other assets.

Those after-tax dollars are essentially redirected into life insurance structures designed to pass more efficiently to the next generation.

For example, in one case Parise described, a retirement account worth roughly $3 million was repositioned over time into life-insurance coverage.

That coverage ultimately created a larger death benefit for the next gen – in this case, growing the potential legacy from $3M to about $15 million.

Now, that’s just one, very specialized example of how to rethink retirement assets once they become legacy assets. Insurance products involve fees, expenses, and underwriting, and there is no guarantee that a similar strategy would produce the same or better results for another individual.

As Parise notes, what’s “best” will depend on factors like your age, health, tax situation, and goals.

But it’s worth knowing that a number of planning approaches exist that aim to manage how much of those retirement assets ultimately goes to taxes once they pass to the next generation.

P.S. For investors who have spent decades building retirement savings, tax season can be a useful reminder to step back and think about how those assets might eventually move to the next generation.

If you’d like to learn more about how advisers like John Parise and his team approach planning questions like these, WorthNet can connect readers with advisers in our network, including Parise and Copper Beech Financial Group, by clicking the button below.

Note that WorthNet itself does not provide advisory services and is not a client of Copper Beech Financial Group or the other advisers in our network. In full transparency, we’re compensated for promoting certain advisers and therefore have a financial incentive to recommend them, which creates a material conflict of interest.

That said, we’re thoughtful about which advisers we introduce to WorthNet readers, and we focus on firms whose experience and perspective we believe can add value alongside the investment research many readers already follow.

John J. Parise

Founder & Managing Partner of Copper Beech Financial Group

Your Generational Wealth Partner

John J. Parise is a seasoned investment adviser who has helped families optimize their investments for taxes and developed cross-generational plans to preserve wealth for nearly 40 years. His firm, Copper Beech Financial Group (CRD #313156), is a proud member of the WorthNet partner adviser network.

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Last Revised: August 11, 2026