@prive40
Saving your beneficiaries some taxes is a good thing as long as you can afford it and it does not harm you financially.
Before giving you my comments - there are a few caveats that might need to be mentioned. I did this but it was several years ago - I converted much of my Traditional IRA / SEPP-IRA to ROTH-IRA but I did it incrementally while watching the tax consequences and any other $$$ consequences.
You said: " But it will be less than the Federal Inheritance Tax limits.". . . . . .
Caveat: Just wanted to add: Right now but you will need to make sure that you stay up on any changes in the law - never know in this political climate what might happen - government needs money, ya' know.
You said: " When I die, they'll inherit the cash & investment accounts (no income taxes until they sell the investments)."
Caveat: I understand this to mean your normal investment, outside of any deemed Retirement Account, cash or investment accounts - AGAIN, you will have to make sure that the law does not change.
I am going to assume that your beneficiaries are all NON-spousal benficiaries.
Your decision, based on the tax consequences to these NON-spousal heirs, is a good one most likely. As long as you can pay the subsequent income taxes and
( Caveat: ) any other possible higher income reporting situations. The one I can think of right off the top of my head is the Medicare IRMMA (Income Related Medicare Monthly Adjustment Amount )
Medicare.gov - Part B Cost for Higher Income Beneficiaries
OR CAVEAT: any other deductions you might lose on your income taxes because of a higher reported income.
Remember, if you are of the age where RMD's from your tax-deferred retirement accounts are due (72 years old beginning in 2020; 70.5 years old prior to 2020), any conversion amount has to be an amount OVER the RMD. Amounts that must be distributed (required minimum distributions) during a particular year aren't eligible for rollover treatment.
The SECURE ACT passed and signed in December 2019 affects the way that NON-spousal beneficiaries have to receive distribution from either a Trad. IRA or a ROTH and IRS Publ. 590-A and Publ 590-B have yet to be completely brought up to speed. There will be more changes effective for tax year 2020. Best to review both of these before any action and understand what changes are coming in 2020..
IRS Publication 590 - A 2019 Contributions to Individual Retirement Arrangements
IRS Publication 590-B 2019 - Distributions from Individual Retirement Arrangements
and an article that highlights these changes:
Investopedia: 01/21/2020 - Roth IRA Required Minimum Distribution (RMD)
Good Luck -
It's Always Something . . . . Roseanna Roseannadanna