Certified public accountants (CPAs) act as advisors to individuals, businesses, financial institutions, nonprofit organizations and government agencies. They are distinguished from other accountants by stringent educational, experience and licensing requirements.

Estate and financial planning can be done best by a team of professionals who work together. A CPA is a key player on the estate planning team, along with a lawyer, a bank trust officer, an insurance agent and an investment advisor. CPAs have knowledge of the tax implications of decisions you make in structuring your estate. They can help assure that you meet your estate planning goals of minimizing the taxes and maximizing the portion of your estate that passes to your heirs.

Today's high rates of inflation and taxation have made accumulating, preserving and disposing of wealth more difficult than ever before.

Sound financial and estate planning can help preserve the financial security that you are working so hard to achieve. It's important to plan for the disposition of property during your lifetime and upon your death. With effective planning, you can minimize the tax burden on your estate and know that your beneficiaries will receive everything that the law allows.

Effective financial planning is essential. An estate you consider of modest value today may become very sizable when measured in inflated market values at the time of your death.

Tax Considerations

CPAs can assist you with many of the facets of your estate plan. Have you considered the following?

  • If you die without a will, disposition of your property in accordance with state law might not be what you desire.
  • Has your plan made best use of the appropriate marital deduction to minimize taxes?
  • Has proper use been made of joint ownership of property? Have you considered the income and gift tax consequences of setting up, transferring or selling joint interests?
  • Have trusts been used to your advantage?
  • Have beneficiaries and ownership of life insurance policies been properly designated?
  • Does your estate plan provide for enough liquid assets in your estate to pay taxes?
  • Does your estate plan take state taxes into consideration?

Gift Giving

Estate and gift taxes are imposed on the current value of property. You can save taxes by making a current gift of some of your property if the property given is likely to appreciate substantially in the future. If you have a number of beneficiaries in mind, a gift-giving program using the annual gift-tax exclusion can help minimize taxes on a substantial portion of your estate.

Other Services

The CPA's role in estate planning does not necessarily end at death. There are the deceased person's final income tax return, the estate tax return and the income tax return of the estate to prepare. CPAs may be involved in the estate valuation process and work with the executor and attorney on the many opportunities for tax savings following the date of death. Again, the goal is to maximize the portion of your estate that passes on to your heirs.

CPAs also may become involved in the IRS audits and in the administration and tax planning of the estate.

The Estate Planning Team

Estate and financial planning require specialized knowledge in many areas. Because of CPAs' close relationships with clients in personal financial affairs and in personal income taxes, CPAs can make a vital contribution to the overall direction and coordination of the entire financial and estate planning team.

That team of professionals can develop a strategy to conserve, increase and, ultimately, pass on your estate with maximum tax savings. Start the team effort by contacting a CPA.

Prepared by the CPA Communications Council in cooperation with the American Institute of Certified Public Accountants. © 1984 AICPA, Inc.

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