Is it inadvisable to leave a Roth IRA to charity upon death?

Question

Short version: I have (for example) $50K of assets in pre-tax accounts, e.g. a traditional IRA, and $50K of assets in my Roth IRA. When I die, I want to leave $70K to charity and $30K to my siblings (I have no spouse or children).

I've read several articles that say it's inadvisable to leave assets in Roth accounts to charity because, for tax reasons, those assets are more useful as estate planning tools. In my case, after allocating the $50K in non-Roth assets to charity, does it make more sense to leave the remaining $20K allocated to charity to my heirs/siblings, with instructions that it be donated to charity? Are there any drawbacks if I leave the $20K to charities directly?

I might be overthinking this, but I wanted to get some feedback here so I'm informed when I speak with an estate planner.

Long version:

While researching estate planning, I came across an article¹ that said

One account you don't want to leave to charity, however, is your Roth IRA. Instead, you should leave Roth IRA balances to your human heirs by designating them as the account beneficiaries. That's because a Roth IRA — unlike a deductible or nondeductible IRA — is a great estate-planning tool.

A Fidelity article adds more detail to this:

be aware that if you’re planning to leave assets to a charity rather than to your heirs, conversion to a Roth IRA has the potential to be disadvantageous. This is because in many cases IRAs can be left to a charity directly, without any tax liability to either the IRA owner or the charity. In such cases, a conversion would incur taxes that could be avoided.

as does a Morningstar article:

Charity is not an income tax-favored choice of beneficiary for a Roth plan. Because distributions from a Roth plan are generally income tax-free anyway, there is no advantage to leaving this asset to an income tax-exempt entity. Thus, [the decedent] should leave the Roth plan either to his spouse or to the children.

So, as I understand it, if I want to donate to charity when I die, I should donate my assets in pre-tax accounts (or generally, other non-Roth assets) before donating my Roth IRA because assets in pre-tax accounts can be left directly to charity without incurring taxes. Converting these assets to a Roth account would needlessly incur taxes.

That brings me to my question. Based on the logic above, the assets I intend to leave to my siblings and their children will come from my Roth account first. However, is it inadvisable to simply leave the rest of my Roth assets (in addition to all my non-Roth assets) to charity?

The articles make it sound like leaving Roth assets to charity is a bad idea because Roth accounts could be used more effectively as estate planning tools, but if after planning and allocating Roth funds in my estate, I still have some left over, I don't think the above logic applies to my case. Are there any other drawbacks to leaving assets in a Roth account to charity directly?

Another option would be to simply name my siblings as contingent beneficiaries to my Roth assets; I prefer not to use this option because I prefer that these assets be left to charity automatically, not at the discretion of my siblings or anyone else.

^{1) I didn't include a link to the article because the website looked suspicious to me; I can include it if necessary.}

Answer 1

You need to keep in mind that there's an exemption amount of more than $5M (five million) dollars for estate tax. Unless you used all of it for gifts during your life time, it will more than cover all of your $70K estate, so there's no need in any additional planning.

As to Roth vs Traditional IRA - if you want to leave something to your siblings, leave them the Roth. Why would you give the taxable income to your siblings when you can give them the nontaxable one? Charities are tax exempt anyway.

Answer 2

I think what those articles are saying is: "If you want to leave some money to charity and some to relatives, don't bequeath a Roth to charity while bequeathing taxable accounts to relatives." In other words, it's not "bad" to leave a Roth IRA to charity, it's just not as good as giving it to humans, if there are humans you want to give money to.

In your situation, the total amount you want to leave to relatives is less than the value of your Roth. So it sounds like the advice as it applies to you is: "Don't leave your relatives $30K from your taxable funds while leaving the whole Roth to charity. Instead, leave $30K of your Roth to your relatives, while leaving all the taxable funds to charity (along with the leftover $20K of the Roth)." In other words, the Roth is a "last resort" for charitable giving --- only give away Roth money to charity if you already gave humans all the money you want to give them. (I'm unsure of the details of how you would actually designate portions of the Roth for different beneficiaries, but some googling suggests it is possible.)