Opportunities for Accountants in Estate Planning

Doug H. Moy
November 29, 2007 — 1,138 views  
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Historically, estate planning has been a neglected area in accounting and tax preparation services. Yet, it offers unlimited financial and professional opportunities for the accountant to earn an excellent living by providing an important and valuable service to existing and new clients. Within the maze of estate and gift tax rules are opportunities for the accountant to develop specialized knowledge in the practice of estate planning. Accountants are, for at least two reasons, in a unique position to offer their clients and prospective clients an estate planning service: first, accountants already provide their existing services for a fee so they don’t have to educate their clients on the concept of charging a fee for their estate planning services; and, secondly, accountants already have a client base from which they can build their estate planning practice. Estate planning is recognized as a function of the practice of public accounting, whether the practitioner is a public accountant, CPA, enrolled agent, tax practitioner or tax return preparer. Aside from lawyers, accountants have unique opportunities to practice estate planning. In this regard, accountants are well-positioned to determine the value of estate assets, including the value of closely-held businesses. In addition, accountants usually possess a more comprehensive understanding of the day-to-day operations of their clients’ businesses than any of the clients’ other advisers. Following a client’s death, the accountant is well-positioned to prepare the estate and fiduciary income tax returns, as well as provide on-going accounting, tax advice and preparation services to the personal representative, trustee and beneficiaries. Instead of being only involved in the administration of the decedent’s estate, the accountant has the opportunity to design and develop an estate plan that can effectively protect the client’s family and avoid the costly mistakes that can otherwise occur. Many accountants recognize that, with regard to estate planning, their clients don’t know how to ask what they don’t know. Accountants are learning that they must assist their clients in asking the right questions relative to their estate planning needs, goals and objectives; otherwise, their clients will continue receiving the wrong answers to their questions. With this recognition in mind, it is realistic for the accountant to take the lead in the estate planning process. Among a person’s advisers, the accountant is more likely to be called upon for answers to estate and gift tax questions. Because our socio-economic system is so tax motivated, most people turn to their accountants, rather than to their lawyers, when seeking answers to tax, business and personal financial issues. The accountant is the most likely adviser to have the greatest detailed knowledge of the client’s overall business and personal financial situation. Accordingly, the accountant is perhaps the most qualified to be the coordinator of the estate planning team and to be in a position to identify estate planning problems and opportunities. According to Thomas J. Hakala in his article, “The CPA Performs Varied But Vital Roles as a Member of the Estate Planning Team,” (15 Estate Planning 352 [Nov/Dec 1988]), in turn, not only should the accountant use his or her unique position to focus the client’s attention on the importance of estate planning but the accountant should also develop a team of appropriate, compatible advisers who can work together in the best interests of the accountant’s clients. The accountant is in the best position to motivate his or her client as to the importance of thorough estate planning. My experience is that even the most wealthy estate owners are not sufficiently motivated to plan their estates. Not only do they lack the initial motivation to plan their estates; but, even if they do, they continue to lack the motivation to implement their estate plans. The reality is that estate planning must be sold. Generally, attorneys are concerned about not influencing their clients’ decisions so they do not “sell” what a client needs, even though they know that their recommendations are in their clients’ best interests. Often, reminders from an attorney to his or her client regarding the client’s need for estate planning, the execution of a document or the need to retitle assets so as to fund a living revocable trust go unheeded because the attorney does not effectively “sell” the immediacy or urgency to act. Because accountants are attuned to the meaning of certain tax reporting deadlines and are skilled at communicating the seriousness of such deadlines to their clients, they can render a valuable service in motivating a client to plan his or her estate and then implement the plan. Martin A Goldberg, J.D., writing in the April 26, 1982, issue of Medical Economics observed that many lawyers will not make independent examinations of the estate owners’ objectives and decisions because they assume that estate owners know what they are doing. Goldberg believes that an objective fee-paid estate planning consultant can make an independent examination of a person’s estate situation and design an estate plan that is compatible with that person’s objectives and philosophies. Goldberg’s admonition is as valid today as it was in 1982. The accountant should and can be that qualified fee-paid estate planning consultant of whom Mr. Goldberg speaks. The accountant’s intimate knowledge of a client’s business and personal financial affairs qualifies the accountant to be the leader of the estate planning team. More often than not, because of this knowledge, the accountant is the professional adviser in the best position to alert his or her client to the importance of estate planning. As the estate planning team leader, the accountant is responsible for coordinating the efforts of other members of the estate planning team to ensure that they do not work at cross purposes with one another. For example, the accountant may need to alert the attorney to special provisions required in a trust, the trustee of which is to own a life insurance policy on the life of the insured estate owner. This is especially true if the insurance is a survivorship life insurance policy issued on the lives of married spouses. The accountant may communicate with a corporate trustee regarding the estate owner’s wishes considering certain provisions to be included in a trust with respect to a marital deduction trust, credit shelter trust or children’s trust. These provisions must, in turn, be communicated to the attorney for inclusion in the trust instrument. As leaders of the estate planning team, accountants should find solace in the acknowledgment by Sidney Kess and Bertil Westlin that, “...the reality is that financial and estate planning is a specialized area of practice; many non-lawyers know more about it than do lawyers. In a world that values getting the job done, who does the job and how it gets done are no longer of critical importance.” Copyright © 2007 by Doug H. Moy. All rights reserved. NOTE: The information in this article is taken from the author’s book, Wealth Preservation: How to Start and Develop an Estate Planning Practice. Copyright © 1998 by Doug H. Moy. All rights reserved. Published by John Wiley & Sons, Inc., Hoboken, NJ, 1998.

Doug H. Moy


Doug H. Moy is a nationally recognized author, consulting specialist, seminar instructor and educator. He has an undergraduate degree from Willamette University and a Masters degree from Washington State University. Since 1979, Mr. Moy has consulted to attorneys, tax practitioners and their clients, as well as assisted practitioners representing clients before the IRS Conference of Right and Appeals Division and Settlement Conference Negotiations. He is noted for his ability to communicate his unparalleled knowledge and experience to practitioners at all levels in his field of expertise; namely, estate/gift taxation and planning, with special expertise in living trusts; community property; lottery prize winnings; structured settlement trusts; extricating clients from abusive trust tax shelters; designing effective estate plans; and preparation of Form 706 Estate Tax Returns and 709 Gift Tax Returns. He offers particular assistance and exceptional skill designing creative, practical solutions to challenging and difficult estate planning situations.