Originally Posted by Badger
Either way I don't need the RMD money for living expenses but would like to prevent increased taxes for a surviving spouse or children's inheritance.
Others have correctly commented that withdrawals are taxed as ordinary income regardless of the source of the funds from inside the IRA.
Two other tax planning items would be good to consider:
First, if you have a Roth IRA and a trad IRA, it's smart to have the lower growth investments in the traditional and the higher growth investments in the traditional IRA. This way you reduce the growth of your RMDs (which you said you don't need) and shift the overall growth more towards the tax free Roth.
Second, consider holistically your heirs' tax situations and yours. If your heirs are in a significantly different tax bracket, it may make sense for you to take out even more than the RMD (or do Roth conversions) and pay taxes at your rate instead of theirs. You also may want to consider the SECURE Act - your heirs will generally have to drain their inherited IRAs in a total of 10 years after you pass away - so if you can divide your traditional IRA among more heirs rather than fewer the tax impact may be lessened overall because they will be less likely to be pushed into a higher bracket.