• Estate Planning ...Why Accountants should be central to the process .

  • It seems that most articles on introductory estate planning cover the basic techniques of estate planning and administration, but fail to discuss how to begin practicing in this field, and what the role of the accountant might be. This article will hopefully provide you with a practical guide to getting involved in estate planning and administration based on my own experiences.


    What Basic Estate Planning and Administration Involves 

    Estate planning can be divided into two topics: planning prior to death (premortem, or “traditional” estate planning) and post-mortem. Premortem is primarily about planning while post-mortem is more about administration, although both phases can include each. Accountants are needed in both phases of this planning.


    Traditional planning involves asset transfer techniques (what method will be used to transfer assets at death). Such choices are not mutually exclusive and include the use of wills and the related probate process, living trusts, joint tenancy, life insurance, super etc. This planning can also focus on minimizing taxes (to the extent desired by the client) in light of the clients’ goals. For example, for many clients it’s possible to minimise tax by effective use of superannuation and trusts.


    Post-mortem planning can include trust funding considerations—such as how to achieve the goals of plans while attempting to simplify the situation, how to fund and minimize income tax consequences, etc. Because tax laws are complex and continually changing, there may be ways to interpret the controlling documents with the laws at the time of death that may have not existed when the documents were signed. Administration involves applying the terms of the estate plan, generally at death.


    The Accountant has a unique background and relationship with each of  their  individual clients that allows them to efficiently serve   clients’ estate related needs. Accountants can add value to  clients’ situations as a “gatekeeper” because you know your clients, and their unique needs and desires. Since accountants generally have contact with them at least once a year (when they prepare their personal income tax returns), you know changes in their personal situations that can require changes to estate plans. This knowledge can be used to benefit your clients either by suggestions that you might make for estate plan changes or for suggestions that the estate-planning lawyer should be consulted. You also know when changes in plans should be considered, especially for changes in the law and as those relate to your clients’ situations.


    In Part 2 we will discuss how to get  started