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3 things every Accountant needs to know about Estate Planning


Everything you need to know about estate planning so that you can assist your clients to prepare for their future, protect their legacy, and empower their beneficiaries.

Promoted by Justice Family Lawyers 5 minute read

Did you know that accountants play an important role when it comes to estate planning?  Many people find estate planning very stressful, not to mention emotional.  There are a lot of factors that need to be considered when planning for the future, and whatever stage you’re at, whether it be drafting a will or administering an estate, accountants can provide expert advice on matters such as tax implications, trust creation and estate structuring.  

Often wills and estate lawyers work alongside accountants to ensure that their client’s estate reflects their intentions and is able to be executed properly.   When assisting a client with their wills and estates manner, it is important to keep these 3 things in mind: 

1. Probate: 

Probate is the legal process of administering an estate after someone has passed.  In the probate stage, the court will review the individual’s will to ensure that it meets the legal requirements, and if satisfied it will make an order to allow the executor to carry out the instructions in the will.  

What does an executor of a Will do?  The executor’s role is to gather the deceased’s assets, pay any outstanding debts or taxes, and distribute the remaining assets according to the deceased’s instructions.  In most cases, the executor will be a family member of the deceased, but in some instances a lawyer or accountant might be appointed to carry out this role.  

As an Accountant, you can assist with this process by: 

     a. Preparing an inventory of the deceased’s assets: this could include gathering information about the value of the assets, such as real estate, investment portfolios, bank accounts and other personal property.  Having an inventory available will help with estate accounting, and the preparation of financial statements.  

    b. Valuing assets:  If the value of an asset is unknown then you may need to assist with the valuation process.  For example, you could help by determining the value of an investment portfolio.  Knowing the value of these assets will be useful when distributing the estate as it will increase transparency and give beneficiaries an accurate overview of their entitlements.  

     c. Final tax return: Accountants can also assist by handling the preparation and filing of a deceased individual’s final tax return which will take into account any income they earned until the date of their passing.  This can also be useful for documenting any income earned by the estate during the probate process.

2. Intestacy: 

An individual is considered to have died “intestate” if they have died without leaving a valid will.  Many people believe that in this situation their spouse will automatically inherit everything when they die, but it’s more complicated than that – if an individual dies without a will, their estate will be administered according to the laws of intestacy.  This is a difficult situation, as the laws of intestacy might not align with their wishes for how they want their estate to be administered and this could have implications for beneficiaries.     

Picture this – an elderly parent is being cared for by one of their children.  Upon their passing they want their estate to be distributed in a way that gives that child a greater inheritance since they have been caring for them in their old age.  In a situation like this, it is important that the parent has a valid will to ensure that their estate is distributed in a way that reflects their intentions and wishes. 

So how can an accountant help? As an accountant, you can advise your clients on the importance of having a valid will, and the implications of intestacy if they do not.  You can also provide them with guidance on the estate planning process and the tools and strategies they can use to ensure their estate plan aligns with their goals and objectives. 

3. Trusts: 

If your client is considering setting up a testamentary trust will then it is likely that they’ll want your opinion on whether this is a good move for them.  Trusts can be very useful in estate planning as they allow an individual to retain control over their assets, protect them from potential creditors and reduce tax liabilities.   

Testamentary trusts can be a great way of distributing assets in a more structured and controlled manner.  Instead of providing a lump-sum distribution, the assets can be managed by a trustee and distributed over time or by installments.  This is especially useful if the beneficiaries need guidance to handle larger assets, or as a way of protecting the assets from poor management. 

In some instances, trusts can also help to avoid probate as assets can be distributed directly to beneficiaries.   This can help by saving time, reducing administrative costs, and maintaining the estates privacy.  

Another significant benefit of trusts is their ability to reduce tax liabilities.   Individuals can take advantage of different tax strategies, such as tax exemptions, deductions, and preferential tax treatments to reduce their tax liabilities.   As an accountant you can help clients to navigate this process and maximise their estates financial outcomes.    

Estate Planning can be an overwhelming process, but with the right advice accountants and wills and estates lawyers can help clients to safeguard their assets for future generations.   

If you want to book in a free, short confidential chat about a particular matter, please get in touch by clicking here.


Author: Hayder Shkara is the principal of Justice Family Lawyers, Melbourne Family Lawyers and Walker Pender. His team has vast experience in family law, including financial and property settlements, divorce, child custody matters, wills and estate, avo lawyers, consent orders and binding financial agreements.

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