<prompt> Human: Hi,Im 33, looking in both directions regarding inheritance issues. Not talking about trust fund kid level wealth, just upper middle class, maybe inherit 500k, and hope to leave a million or two, probably less than the 5 million inheritance tax in any case.Parent:-Do her tax-deferred assets IRA 401k count toward the 5 million inheritance tax exclusion? If so, does it use the pretax value or some kind of estimated tax that will be paid? It seems crappy to count a before-tax amount...-With my parent lacking a spouse I understand that I would obtain my portion as an Inherited IRA. If I dont deplete this account in my lifetime, can it then similarly and seamlessly pass to my own children or lacking, nephewniece? along with my own accumulated accounts? I didnt find anything about Inherited IRA passing through multiple generations.Me: What is the best way to plan for generational wealth? I aim to leave money behind, whether its to children that I may have, or nephewsniece. I currently dont invest past my max 401, max HSA, and max roth IRA though eventually would have a real estate portion and other post-tax. Is the inheritance treatment of these accounts generally favorable enough that it is always better to put money in them first, than to having something in a post tax, or some kind of trust account?-If I want money that I leave to be able to aid future generations before their own retirement without massive penalties and taxes, is it better to avoid retirement accounts? I fancy money I leave being used toward education, home purchase, building a business, etc, before reaching their own retirement age of 59.5...In short, while I hope my parents has 20 years still, Id like to not see it screwed up when the time comes as it has in previous generations, and for myself, I seek validation and guidance of my current choices of wealth building vehicles.  <response>: When an inherited IRA passes to a beneficiary, they use the same schedule that applied to you. They just continue with the RMDs using values you would have. This quashes the attempt to super-stretch it. I think you can probably find that explained somewhere in Pub 590-B.Death of a beneficiary. In general, the beneficiaries of a deceased beneficiary must continue to take the required minimum distributions after the deceased beneficiarys death, based on the distribution schedule established by that beneficiary under the rules in the following paragraphs. The beneficiaries of a deceased beneficiary do not calculate required minimum distributions using their own life expectancies.Source: Pub 590-B.Pub 590-B also says that there isnt any 10 penalty for early distributions from an inherited IRA. So if your heirs need to draw from a trad IRA, they can as long as they pay income taxes. See the list of exceptions to the 10 penalty.Regarding your last question, I think one advantage of stuffing Roth account is that it passes on tax free to beneficiary. They do have to take RMDs, but dont pay tax. There is also nothing blocking them from taking as much as they want, when they want. Your dead hand cant control how they spend their distributions, though. If you want to restrict how they use what they inherit, then I think a trust is the vehicle for that. 