Converting a traditional IRA into a Roth IRA has many advantages and disadvantages, but what many people don’t realize is that it can provide some estate planning benefits.

If you convert to a Roth, you’ll have to pay income tax on the value of the IRA right away – just as if you received the entire amount as income. On the other hand, all future withdrawals will be tax-free, and there are no minimum required distributions during your lifetime.

Converting may make sense if (1) you have enough assets to pay the income tax without dipping into the IRA itself, and (2) you won’t need to take distributions from the IRA during your lifetime and can leave it to your heirs.

One benefit is that your taxable estate will be reduced by the amount that you pay now in income tax, which is useful if your estate is large enough to be subject to the estate tax. While the federal estate tax now only affects estates of more than $5.43 million, many people are also subject to state estate taxes that kick in at much smaller amounts.

A second benefit is that you don’t have to take minimum annual distributions. If you don’t need these distributions, they will merely create unnecessary taxable income for you each year after you turn 70½, with the amount increasing each year. These distributions can push you into a higher tax bracket, reduce your itemized deductions, increase taxes on your Social Security benefits, and cause other problems. Often it’s cheaper in the long run to pay the tax now all at once than to create tax headaches for yourself every single year after you turn 70½.