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Accounting, Estate Planning

Estate planning ripe for accountant involvement

accountants estate planning

SMSF accountants should consider offering estate planning services to clients as few other groups are currently meeting their need for advice.

Accountants working in the SMSF sector should consider providing estate planning services and not leave this work to lawyers who may be unable to develop and manage an estate plan, according to the head of an accounting services provider.

Easton Investments chief executive Greg Hayes said many accountants view estate planning as a job for lawyers, but this view was “nonsense” and accountants had a key role to play.

“The lawyer’s role in estate planning is to put in place the documentation that enacts the estate plan, but the lawyer’s role is not to create the plan. Some can and specialise in that work, but they are a rarity,” Hayes told SMSF accountants at the Easton Wealth SMSF Adviser Conference in Sydney last week.

“When we think of the legal documents in place, in particular the will, they are the documents that enact the plan and are an important piece to have, but it is not where the hard work is done. Ninety per cent of estate planning work is the advice around capturing the estate and how it can be best managed.”

He said few accountants currently were involved in estate planning despite the growing current and future need among baby boomers for advice in this area.

“We live in a country with an ageing population and where wealth among the top 20 per cent has expanded dramatically, and what this means from an estate planning point of view is that you have a large market for advice,” he said.

“Of the accounting firms we have spoken to around the country, which is around 700, less than 5 per cent of firms deliver estate planning services in any structured way for their clients.

“In terms of a competitive opportunity, this is enormous because there is not a lot of competition out there in the marketplace in terms of accountants providing this service.”

He pointed out that while estate planning was not an issue that was exclusive to the baby boomer demographic, it is becoming a major issue for many in that group, which represents 25 per cent of the population but holds 55 per cent of the wealth and would be part of an intergenerational wealth transfer estimated at $2.4 trillion.

Many people in this demographic were unaware of their needs, but would be attracted to advice if made aware of the potential issues they may face in the future, he said.

“When we start talking with clients, chances are not many will be aware of the issues they are facing and the facts will surprise them. Part of our job is to be alert to the triggers, which are not always financial, but could be emotional concerns about their family group and how the estate will flow through and how they can best manage that,” he noted.

“The great thing about this work is that once you start to talk about and raise the issues with clients, they self-select. It is not a service you need to sell to clients; it is a service you inform them about, let them know about the issues and they self-select based on who needs it.”

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