When the client wants to leave it to the cat.

Author:Hayers, Michael
Position:Unusual bequests; leaving property to pets

Some tips to help make sure unusual bequests withstand scrutiny.

CPAs and lawyers who specialize in estate planning provide help with the most serious undertaking of life: dying. How to disperse resources that soon will be left behind is a sensitive and private decision. In planning what to do with their wealth, clients acknowledge their mortality and consider what goals they posthumously want to fulfill. They may wish to do good, give pleasure and provide for loved ones--and even ensure that companion animals will be properly cared for.

The practitioner who is asked to help has to have sensitivity to the client's feelings as well as know where to steer him or her. In educating people about the possibilities, the CPA's involvement may extend from analyzing the client's overall finances to consulting with the lawyer who prepares the will to acting as executor of the estate. The role will depend on the client's wishes and family dynamics.

To safely and legally guide someone in making an unusual bequest, a CPA may need to think creatively and develop techniques to comply with a client's priorities--whether it's to leave money to a live-in companion, a nature preserve or a pet. Because estate consulting requires counseling skills and empathy as well as technical knowledge, "it takes a while to get good at it," says Robert Keebler, CPA and tax specialist at Virchow, Krause & Co., Platteville, Wisconsin. He breaks the process down into seven steps:

1. Gather complete information about the client's finances and family.

2. Do the financial projections for different ways of leaving the estate.

3. Educate your client about the tax pros and cons of each scenario.

4. Have your client define his or her goals.

5. Make proposals on how to implement those goals.

6. Lay all the information out in a comprehensive plan.

7. Implement the plan; have a lawyer prepare the documents and make them airtight.


The starting point in any estate plan is the inventory of a client's assets, retirement accounts, debts and life insurance--"as well as all his or her secrets," says David S. Rhine, CPA, a Rockland County, New York, family wealth planner who has been doing estate work for 30 years.

Because extreme emotions are involved when people talk about death, the CPA must listen very carefully, he says. He cites as an example a client who had been subsidizing his sister and brother-in-law while keeping it from his wife. That continued assistance--and a tactful way of leveling with the wife--had to be built into the estate arrangements. (The help appeared to begin with the estate plan--prior gifts were not discussed.)

Although some requests may seem frivolous, they are meaningful to the client. "If an 80-year-old with $10 million and a Dachshund wanted me to draft a plan leaving his money to the dog, I'd encourage him to find uses I believe are more beneficial to society," says Jordan Berger, a CPA and lawyer who is a managing director of American Express Tax and Business Services in Chicago. "But it's the client's estate plan, not mine. It's my job to give clients their legal options."

Kenneth Brier, a CPA and lawyer at Bingham Dana LLP in Boston, had such a client--an 85-year-old woman with a large estate who wanted her plan to include several pets. "We carved out a piece of the estate--about $100,000--so the income from it would take care of them. The balance went to charity," he says. "Leaving too much to pets creates a litigation target for family members as well as a perception that the donor is mentally unbalanced," he adds.


Once the client's assets have been inventoried, the CPA...

To continue reading