When a CPA and financial adviser work together, their mutual client benefits from the expertise of both. Because of the regular interactions CPAs and financial advisers have with their clients, they may be in the best position to recognize estate planning opportunities or other actions that can help clients carry out their wealth transfer intent.
By Thomas K. Williams, CPA, CFP
When a CPA and financial adviser work together, their mutual client benefits from the expertise of both, especially when it comes to tax and financial planning. Tax planning is multidimensional, including income tax planning as well as estate planning.
Within estate planning, the current estate and gift tax exemption of $11.7 million per person in 2021 allows many clients to avoid federal estate taxes. This amount, however, may have a limited shelf life. Later in 2021, Congress may significantly reduce the amount of both the estate and gift tax exemptions.
Regardless of if, when, and how much the exemptions change, most clients should review their estate plans periodically for a variety of reasons – not all regarding the potential liability for estate or gift taxes. Because of the regular interactions CPAs and financial advisers have with their clients, they may be in the best position to recognize estate planning opportunities or other actions that can help clients carry out their wealth transfer intent. Estate planning attorneys also play an important role when documents need to be drafted or revised, but the CPA and financial adviser may have a deeper and more current understanding of a client’s financial picture and goals. This enables them to proactively identify estate planning discussion points to determine if further action is required.
Situations where CPAs and financial advisers may work in tandem on estate planning include the following:
Many situations can arise over a client’s lifetime that can change the thinking about an estate plan, including changes in asset values, family dynamics, and health. CPAs and financial advisers working together can be at the forefront of identifying both opportunities and weaknesses in a client’s financial and estate planning situation. This team approach can serve clients and their families in a meaningful way over multiple generations.
Thomas K. Williams, CPA, CFP, is partner, senior wealth advisor, and chief executive officer of Domani Wealth in Lancaster. He can be reached at tom.williams@domaniwealth.com.
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Statements of fact and opinion are the authors’ responsibility alone and do not imply an opinion on the part of PICPA officers or members. The information contained in herein does not constitute accounting, legal, or professional advice. For professional advice, please engage or consult a qualified professional.