Don’t Make This Inheritance Mistake. It Could Cost Your Loved Ones Big Time.

Suppose you have a $3 million brokerage account and a $3 million tax-deferred retirement account. Your daughter, who already is in a high tax bracket under her salary, will pay tax on every dollar she pulls out of the retirement account. The Salvation Army, meanwhile, won’t pay taxes in either case—whether it receives the retirement account or the brokerage account.