CPAs & Estate Planning.

• Author: Claflin, David

Our previous article (California CPA, November 2017) pointed out the unique opportunities that exist for CPAs to actively participate--with the attorney and other advisers--in the estate planning process for selected client families. We emphasized that both quantitative (tax avoidance, asset protection, etc.) and quantitative (avoiding the unintended negative effects of inherited wealth on future generations) aspects must be equally considered for a multi-generational wealth transfer plan to be successful. CPAs are well-positioned to contribute on both sides of the equation.

This article highlights the continuum of points in the estate planning process where the CPAs unique perspectives and skill set will support clients in pursuing their estate planning goals.

Let's begin by recognizing that the estate planning horizon may cover decades--grandchildren, great grandchildren and beyond. The planning process must envision the multitude of issues that may arise and allow the mechanisms for solutions to be implemented as needed.

For brevity, we're going to look only at testamentary (clients with wills or revocable trusts) estate planning and a traditional married couple.

While Clients Are Alive

The crucial time when the "architectural" decisions that can enable or thwart the plan's success should be made is while both clients are alive and healthy (i.e., before the estate plan is activated by the death of a client). CPA participation at this point may be essential in several respects.

Helping Select The Team Of Professionals That Will Assist The Client Through The Planning And Into The Implementation Phases

This involves helping to locate an attorney whose competences--and personality--match the family's needs. The financial adviser also should be involved at this point to the extent possible (estate liquidity at this point may provide constraints, as it's difficult to use a financial adviser for an estate with little liquidity to invest).

Selecting the appropriate trustees and trust protectors (or the means for selecting them in the future) is another crucial issue. Together, these professionals will form a network of professional and personal support for the client family when the need to turn over control from the client arises. To be prepared for the time of need, this team must already be in place and comfortably performing services during the lifetime of the clients.

Over time, it's important to provide for succession of the various...