The Cpa Advantage Why Tax Expertise Is Essential To The Planning Process?

Name

Email*

Phone*

Message*

Schedule My Free Consultation

Confidential. No obligation.

Why Should Your Estate Planning Attorney Also Be a CPA?

Estate planning isn’t just about where your assets go after you’re gone; it’s about how much of your assets go to your beneficiaries. While a traditional attorney can handle the legal documents – the wills, trusts, and powers of attorney – they often lack the deep tax knowledge needed to minimize estate taxes, capital gains, and other potential liabilities. This is where a CPA-Attorney comes in.

As an Estate Planning Attorney and CPA with over 35 years of experience in San Diego, California, I’ve seen firsthand how crucial this dual expertise can be. Many clients come to me after working with attorneys who missed significant tax-saving opportunities. It’s not a matter of blame, but a matter of specialization. Tax law is a constantly evolving beast, and it requires dedicated, ongoing study to navigate effectively.

Understanding the Step-Up in Basis and Capital Gains

One of the most significant benefits of proper estate planning is the “step-up in basis” of inherited assets. When you inherit an asset, its cost basis is adjusted to its fair market value on the date of the decedent’s death. This can dramatically reduce capital gains taxes when the beneficiary eventually sells the asset. However, maximizing this benefit requires careful planning and valuation. A CPA understands these nuances and can structure your estate to take full advantage of the step-up in basis rules.

For example, if you purchased stock for $10,000 and it’s worth $50,000 at the time of your death, your heirs will inherit it with a basis of $50,000. If they sell it immediately, they’ll only pay capital gains tax on the $40,000 difference, rather than the entire $50,000 gain. Without a CPA’s guidance, this opportunity can be lost or diminished.

The Importance of Accurate Asset Valuation

Accurate asset valuation is critical for estate tax purposes. The IRS scrutinizes estate valuations, and an inflated or deflated value can lead to penalties and legal challenges. A CPA is trained in valuation techniques and can work with qualified appraisers to ensure your assets are accurately assessed. This is especially important for closely held businesses, real estate, and other complex assets.

How a CPA-Attorney Can Protect Your Family in San Diego

Estate planning is a holistic process that requires a comprehensive understanding of your financial situation, your goals, and the tax implications of your decisions. A CPA-Attorney can provide this holistic approach, integrating legal and tax expertise to create a plan that protects your family and minimizes your tax burden. We’re not just drafting documents; we’re crafting a strategy to preserve your wealth for future generations.

What Happens If Your Estate Plan Doesn’t Account for Taxes?

Without proper tax planning, your estate could be subject to unnecessary taxes, reducing the amount your beneficiaries receive. This can also lead to disputes among family members and legal challenges. A well-structured estate plan, guided by a CPA-Attorney, can avoid these pitfalls and ensure your wishes are carried out efficiently and effectively.

Can a Trust Protect Assets from Creditors?

Trusts can be powerful tools for asset protection, but they’re not a one-size-fits-all solution. The type of trust you choose and how it’s structured will determine its effectiveness in shielding your assets from creditors. Spendthrift provisions, for example, can prevent beneficiaries from squandering their inheritance and protect it from their creditors. A CPA-Attorney can advise you on the best trust structure for your specific needs and goals.

What is a Pour-Over Will and Why Do I Need One?

A pour-over will is a safety net that ensures any assets not already titled in your trust are transferred to the trust upon your death. This is particularly important if you acquire new assets after creating your trust. Without a pour-over will, those assets could be subject to probate, defeating the purpose of the trust. A CPA-Attorney can ensure your pour-over will is properly drafted and coordinated with your trust.

What is the Difference Between a Healthcare Directive and a POLST/DNR?

Both healthcare directives and POLST/DNR orders outline your wishes regarding medical treatment, but they serve different purposes. A healthcare directive (also known as an advance healthcare directive) is a broad document that specifies your preferences for end-of-life care. A POLST/DNR (Physician Orders for Life-Sustaining Treatment/Do Not Resuscitate) is a medical order signed by a physician that outlines specific instructions for emergency medical care. A CPA-Attorney can help you create both documents to ensure your wishes are respected.

What Happens When a Successor Trustee Takes Over?

The transition of a successor trustee can be complex, especially if the original trustee becomes incapacitated or dies. A well-drafted trust document will outline the procedures for appointing a successor trustee and transferring assets. It’s also important to ensure the successor trustee understands their fiduciary duties and responsibilities. A CPA-Attorney can guide you through this process and provide ongoing support to the successor trustee.

What About Digital Assets and Passwords?

In today’s digital world, digital assets – such as online accounts, social media profiles, and cryptocurrency – are often significant parts of an estate. Without proper planning, these assets can be difficult to access and manage after your death. Under **RUFADAA** (Probate Code § 870), specific language in a Trust or Will is required to allow an executor access to digital accounts. A CPA-Attorney can help you create a digital asset inventory and include the necessary provisions in your estate plan.