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As an accountant, you help your clients to set up companies, trusts and self-managed super funds. You ensure they don’t pay more tax than they legally need to – and you know their business and personal finances inside out.
Why accountants should be at the centre of the estate planning process
18 July 2022
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4 minute read
As an accountant, you help your clients to set up companies, trusts and self-managed super funds. You ensure they don’t pay more tax than they legally need to – and you know their business and personal finances inside out. Yet, when it comes to estate planning and asset protection, you probably hand them over to a lawyer who might understand far less about tax, superannuation and other critical considerations.
Some accountants do this automatically in the belief they have no choice. This isn’t the case. And that means you have a significant opportunity to grow your business by supporting your clients with a service you’re well qualified to provide.
Your clients need to know why estate planning is so important
Many people believe that a will and estate planning are the same thing. It’s true that a will is the principal component of the plan, but estate planning goes further in ensuring your clients’ wealth will be distributed in the way they want without being eaten away by unnecessary costs and taxes.
The will sets out the distribution of what are known as estate assets. These include property, cash and shares along with personal items such as jewellery. Non-estate assets such as superannuation, insurance payouts and company assets can be included in the will but need to be stipulated. Different business structures also affect how assets need to be treated. It’s easy to see how this complexity could make your input invaluable.
An estate plan also includes an enduring power of attorney. This gives someone chosen by a client the right to make financial and legal decisions on their behalf. Then there’s asset protection. This is the element most likely to be overlooked yet, without it, unforeseen events or third party claims could reduce, or even destroy, your client’s accumulated wealth.
Spell out how much is at stake
Everyone with assets to distribute should have an estate plan.
Some of your clients may think they aren’t wealthy enough to justify the cost. However, many people are wealthier than they think.
Take, for example a couple with $500,000 of equity in their home. If they both have a million dollars in life cover and $100,000 in super, which isn’t unusual, their assets would total almost three million dollars.
Rising property values are also making many more people wealthy through inheritance. Research suggests that the children of baby boomers will receive a massive $3.5 trillion in the next 15 years. The fact that so much money will be changing hands should be an extra incentive for you to include estate planning in the range of services you offer.
Of course, estate planning is equally important for accountants and their families. If you don’t already have a plan in place, taking yourself through the process will not only give you and your family peace of mind, you will also have a better understanding when you’re discussing the matter with your clients.
Collaborate with a lawyer to provide a complete service
Many lawyers agree that accountants are better-equipped to handle much of the estate management process. However, as you aren’t permitted to provide legal advice, you will need a lawyer’s input. Collaboration can work well for both sides, leaving lawyers free to focus on their areas of expertise as you strengthen your value proposition. Bringing a second expert into your team will underline your professionalism and commitment to client service, and your clients will also appreciate the convenience of having you take care of the whole procedure on their behalf.
Make estate planning a natural part of the conversation
Some accountants find that a discussion about estate planning flows on smoothly and logically from advice on fundamentals such as investments, pensions and insurances. Others have found that their clients are more engaged when they use the topic to open the conversation. Either way, it’s worth reminding your clients of how hard they work to amass wealth and assets. You can then show how, without a sound plan, these could easily end up in the wrong hands.
The fee you charge for estate planning may initially seem high but, once your clients see for themselves how much they’re worth and just how much is at stake, they will also see the value of the service you can provide.
How to get stared with Estate Planning in your firm
To learn more about how to get started with Estate Planning in your firm, download your guide, Turbocharge Estate Planning in Your Practice.
With the ChangeGPS Estate Planning resources, you’ll be able to deliver these services to you clients with confidence. To learn about our marketing materials, training resources and systems to help your get started in your firm, book in a consultation with our team.
