Updated July 28, 2026. Quick answer: Equal dollars are not equal after tax. A traditional IRA arrives with a full income-tax liability attached; a taxable brokerage account arrives with its embedded gain forgiven by the basis step-up. Splitting “equally” by balance can be substantially unequal in practice.
What each asset carries with it
| Asset | What the heir receives |
|---|---|
| Traditional IRA / 401(k) | Full ordinary-income liability, compressed into 10 years |
| Roth IRA | Tax-free, still 10 years |
| Taxable brokerage | Basis step-up — embedded gain generally forgiven |
| Primary residence | Step-up, plus its own state-level complications |
| HSA | To a non-spouse, fully taxable immediately |
The practical consequence
If one child receives the IRA and another the brokerage account at the same balance, the second child receives materially more. Where beneficiaries are in different brackets, the gap widens further.
If equal treatment matters to you, equalise on after-tax value, or give every child a proportional slice of every account. The second is simpler and harder to get wrong, and it removes the argument that follows an unequal-feeling split.
Where charity fits
If any charitable giving is planned, it should come from the traditional IRA first — see why the IRA is the asset to give.
Sources
SECURE Act (2019); SECURE 2.0 (2022); final RMD regulations published 19 July 2024; IRC §401(a)(9); IRC §1014 (basis of property acquired from a decedent); IRC §664 (charitable remainder trusts). Cross-checked July 2026 against professional analyses from Kitces, Grant Thornton, Ascensus, Charles Schwab and Kiplinger. Indexed figures and state-specific rules are flagged rather than asserted.
This states what the cited authority says. It is not tax or legal advice, and beneficiary planning turns on family facts and state law that no page can see.