Having just one IRA instead of several may simplify paperwork and minimize fees. But when you begin to think about leaving IRA funds to heirs, consider using more than one IRA to do so. Here are reasons why:
Preserve Funds for Bequests in a Roth IRA
Statistics show that the great majority of IRA funds reside in traditional IRAs. However, traditional IRAs must make annual required minimum distributions (RMDs) to their owners starting at age 70½. This works contrary to the intent of leaving IRA funds to heirs because RMDs deplete the IRA while the owner is alive. Roth IRAs, to the contrary, have no RMDs for their owners. So if you currently have all your IRA funds in a traditional IRA but would like to leave some portion of them to heirs, consider converting that portion of the funds to Roth IRA status.