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I think there is another point to consider as well: What tax bracket are your kids in? Some parents have accumulated significant wealth with "modest" income while their children might have high paying jobs (and/or live in high tax states). In this case there could be a significant increase in the marginal tax rate paid on the money coming out of a traditional IRA/401(k).

For example, consider parents living in Washington State (no income tax) with income of 100K. Suppose further that their two kids live in San Francisco and NYC and each earn 500K+ a year. For the kids, a marginal dollar coming out of an inherited traditional IRA would be taxed at 45-50%. For the parents, a marginal dollar being converted to a Roth would be taxed at around 25%. So, in this type of situation, there is a pretty big opportunity for what I call "marginal tax rate arbitrage."

Just another wrinkle...
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