Is an attorney or a CPA the best source for estate planning advice?

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Answered by: Laurie, An Expert in the Wills and Estate Planning - General Category
"Estate planning" is a more formal term for making financial and legal arrangements for your family and other heirs upon your death. Estate planning may consist of a simple Will, or may involve more complex instruments such as revocable and irrevocable trusts. But how do you decide the best estate planning options for you and your loved ones?



Most people turn to one of two sources for estate planning advice: an attorney or a CPA (or sometimes both). Which you choose will depend to a large degree upon the type of advice you seek and your ultimate estate planning goals.

CHOOSING AN ATTORNEY



If most of your questions encompass the legal implications of your estate plan, you should probably consult an attorney first. There are so many different estate planning options and an attorney will be the best source for helping you choose the best alternatives for your needs. Surveys by publications such as "Forbes" estimate that somewhere between 60-75% of Americans do not have a Will. But the truth is that everyone has an estate plan. If you do not make your own, state law has created one for you. An estate planning attorney can make sure that your estate is distributed according to your wishes, not according to a generic scheme devised by legislators. Also, since the laws that govern estate planning differ from state to state, it is important that the advisor you choose has expertise in your state of residence.

For many people, a simple Will may be all that is needed. But more complex instruments such as revocable trusts, irrevocable trusts, powers of attorney, special needs trusts, and other vehicles may better fit your criteria. An estate planning attorney will be able to help you make these determinations.

By giving an estate planning attorney an overview of your family circumstances and your wishes, you can work with your attorney not only to distribute your estate as you wish, but also to create plans that will benefit and protect your heirs not only immediately after your death, but even through future generations. Proper planning may even maximize the value of your assets during YOUR lifetime, providing you with a nest egg for retirement.

Some estate planning attorneys may also see your estate through the administration process, whether this involves the probate process or serving as trustee of a trust. The attorney who prepared your estate plan is often a good choice for these purposes as they are familiar with your wishes and intentions.

ESTATE TAXES AND FINANCIAL PLANNING

While estate planning attorneys must be familiar with the basics of the tax implications of each estate planning option, more complex estates may require more sophisticated planning by a professional who deals primarily with the tax laws. A CPA must know the intricacies of tax laws to advise clients, while estate planning attorneys may have only a broad overview of these concepts. Estate and gift tax laws change frequently and a CPA stays on top of these changes and designs your plan accordingly to get the maximum tax savings for your estate. Otherwise, your heirs could lose a good portion of your estate to the IRS.

In addition to an attorney and a CPA, you may also want to consider having a financial advisor on your team. Whether fee-based or commission-based, they can help you design a strategy using investments, 401(k)'s, IRA's and other options to grow your estate before it is passed on to your heirs.

Creating a "team" for your estate plan is a smart strategy, as each member of the team can provide "checks and balances" for the other members of the team. But you should invest some time and research in choosing these advisors as they will be intimately involved with you, your family and your assets both during and after your lifetime.

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