How CPAs Can Take the Lead on Estate Planning

American business writer Tom Peters said, “If a window of opportunity appears, don't pull down the shade.” That can be easily applied to CPAs and the modern accounting profession. I’ve had the pleasure to work with some incredible CPAs in my career, and the most successful and entrepreneurial among them have one important thing in common: They always have their eye on the horizon and are inspired by the opportunities ahead. So, what’s the next opportunity where CPAs can truly advise their clients to thrive amid this changing business landscape?  Estate planning.

Benefits of Estate Planning

President Biden’s plan to increase taxes on the highest earners and wealthiest Americans presents CPAs, as their client’s most trusted advisor (according to OnPay, 86 percent of small business owners agree that their accountant is their most trusted advisor), with the greatest opportunity in decades to grow their business with high-net-worth and business-owner clients. CPAs who use this time wisely to partner with financial advisors and other financial services experts will find themselves armed with a significant competitive advantage in the years ahead.

Estate tax planning used to be the preferred path to prospecting wealthy clients. This is because estate tax exemptions were as low as $2 million just eight years ago for wealthy families, and clients were hungry for advice on how to reduce their tax exposure. For smart CPAs who felt comfortable discussing the impact of estate taxes, the pre-$11 million exemption years were filled with opportunity. Since 2018, the $11 million estate tax exemption put estate tax planning on the backburner. This wasn’t a surprise considering only 1percent — or 3.3 million American families — had a net worth over $11 million. With estate tax exemptions set to be lowered to $5 million, the number of American families whose wealth will be exposed to federal estate taxes will now be closer to 3 percent.  

That means seven million more families will be looking for estate planning, which means seven million more opportunities for savvy CPAs.

Now is the time to be forward thinking and to model outcomes. Those who wait until the tax law changes are enacted or, worse yet, until the end of the year when everyone else is thinking about charitable and other gifts, will be wishing they planned ahead.

Tools You Can Use

It is time to evaluate the tools in your toolbox. Here are four considerations:

• Remember that life insurance and annuities can become avenues that are heavily utilized if the proposal related to incorporating an asset’s value and growth is enacted.
• Begin discussing the concept of net return with your wealthiest clients.
• Educate yourself on how products implemented properly can help with tax planning strategies.
• Align yourself with a financial advisor who has estate planning expertise. By leveraging their case design expertise, you’ll be able to bring proactive solutions to the table.

Considering all growth options for your clients, such as estate planning, will only boost your status as the trusted advisor.

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John C. Pastore John C. Pastore, Jr., CRPC, is a senior vice president and private wealth manager at Integrated Financial Partners, a registered investment advisor. More content by John C. Pastore: In a World of Gimmicks, Be a Thought Leader