Estate Planning for CPAs

February 17, 2023

By Jannette Brooks, CPA

Many of us only think of estate planning for our time of death and wealth transfer. However, your estate planning documents may spring into action when a triggering event, such as disability, death or divorce occurs. Planning for these events along with preparing essential estate planning documents is a sign that shows love to those you leave behind or who may be impacted financially.

When creating a will or trust, you need to discern which assets you need to plan for. In California and many community property states, all assets acquired during marriage are considered to be owned by both spouses. Specifically, California law says those assets can be owned 50 percent of each item (item theory) or 50 percent of the total (aggregate theory). Title to assets doesn’t always reflect the true ownership, but should. Assets acquired before marriage are separate property along with assets received by gift or inheritance. If someone wants them to stay separate, they need to title them as separate. Assets titled jointly are often treated as community property in divorce and owned 50 percent each for estate purposes.

Probate is the process used to transfer the title of assets at death from the decedent to the beneficiaries. This is a court proceeding that can be relatively simple if all property is held as community property or are very low in value. People avoid probate by holding property in some form of joint ownership or transferring property to a trust. A probate proceeding could take one to two years and the administrator, attorney and appraiser are compensated based on the value of assets. As a result, many want to avoid the process.

Asset Listing & Considerations

Create a complete list of assets and estimated values to include bank accounts (checking/savings and money market, CDs, brokerage accounts and investments held outside of a brokerage account, such as stocks owned individually, private investments, real estate assets and business interest). Estates are valued based on the Gross Market Value of all your assets without deducting your debts/liabilities; having a complete list will support your executor and trustee in assessing what work needs to be done to settle your affairs and transition your wealth. 

Primary Residence

Many individuals do not consider creating a living trust until they acquire a primary residence. Determine if your primary home will need to be sold or if funds will need to be set aside to maintain the home upon your death. If your beneficiaries are independent adults, perhaps the home needs to be sold to fund gifts or trusts. If your children are minors or you have special-needs individuals you want to care for, will you leave your home in a trust with enough funds to maintain the home, pay the mortgage, property taxes, etc.?

Second Homes or Rental Properties

Trustees are required to follow prudent investor rules requiring they consider the purpose, terms, distribution requirements and any other circumstance of the trust when making investment decisions. You may enjoy this additional property, but your beneficiaries may not. If it’s important that the property remain “in the family,” then you will need to provide direction to your trustee.

Personal Property

Often, family disagreements occur over a family heirloom that may not be the most valuable asset owned. As a best practice, talking to your beneficiaries about who will receive personal effects can help your executor avoid family discomforts and clean out your home to prepare the home for transition. Make a list of your personal belongings pictures, furniture, artwork, collections (books, stamps, etc.), family heirlooms, cars, etc. and list who you benefit. At death, a value will be assigned to each personal property item and as part of your estate value. Leaving personal property unlisted or without naming a beneficiary can delay transitioning your wealth. The listing should be separate from your will or trust agreement for ease of updating.

Retirement Accounts 

These assets pass by beneficiary designation instead of in accordance with your will or trust agreement. It’s best practice to name both a primary and a contingent beneficiary. Naming a secondary beneficiary protects the account owner in case of the premature death of the primary beneficiary and allows for disclaimers of benefits. It’s very important that the beneficiaries named be consistent with your overall wishes as shown in your will or trust agreement. If you’re planning on leaving retirement accounts to charities, they may be prohibited from holding certain types of investments which may entail additional planning and communication with the charity and your fiduciary.

Digital Assets

In today’s digital world individuals have gone paperless. Leaving a list of your virtual assets and codes, online accounts and passwords available for your executor or trustee to access right away can avoid complications. Include in your list login information on your social media accounts. Set up executor or trustee authorization for Apple or Android devices to allow phone access. 

Although virtual assets such as NFTs and virtual coins are not tangible assets, leaving codes in a good old safe deposit box is a best practice.

Closely Held Business

If you own a business, your estate plan is not complete until you have completed a business transition plan in case of divorce, death, disability, business disagreement or departures of key employees. The value of your business and your estate can be diminished if you fail to plan for a business exit. Life or disability insurance should be considered in your plan.

Health Care Agents and Attorneys-in-Fact

Who is the right person to manage your affairs during your life if you become unable to care for yourself or manage your finances? The person making medical decisions for you may not be the best person to manage your finances or business affairs. Selecting the best person for each role is important. Making sure they can work together is also important as the person caring for you may need to ask for money from the person managing your finances. Identifying someone in your day-to-day life could make the transition easier. If you do not have someone like that, a private fiduciary be a great resource.

End of Life Care

Your health care agent may be faced with making end-of-life decisions for you and your living will or health care power of attorney will guide them and give them authority to act on your behalf. Consider what life sustaining procedures and end-of-life care you would like and communicate them to your health care agent. If you’re diagnosed with a terminal illness, the California End of Life Option Act went into effect on June 9, 2016. This law allows terminally ill adults to have more options on end-of-life matters. 

Minor Children

If you have children under the age of 18 you must name a legal guardian for them. Additional consideration and conversations with the surviving parent should take place when you’re divorced and have legal joint custody. Aligning your estate plans with your co-parent for your children’s guardian can avoid having your child end up in the hands of the court and potentially in a stranger’s home. In each case, the parent should consider whether the surviving parent or guardian can sustain the child or children and if they can or should leave funds for the children’s needs. In the case of divorced individuals, documents can reference custody terms and have a plan B if the co-parent is not able to care for the minor. Often the best caregiver for your children is not necessarily the most appropriate person to handle finances; your documents can specify the plan for both guardianship and financial support separately. A best practice is to list alternate guardians in case the named guardian cannot or will on not be able to serve as guardian.

Special Needs Family Members

Individuals with special needs children or family members should consider working with an estate planning attorney that has experience planning for special needs people. There are specific laws and regulations that dictate how much can be left to a special needs individual before disqualifying them from government assistance programs. The Special Need Alliance Organization ( provides guidance and information that can support planning needs for special needs family members. 

Serving as a Fiduciary

As a CPA you have special considerations when serving as a client’s fiduciary. If you provide services on federal tax matters, members must consider both the AICPA Code and Circular 230 in determining whether a conflict of interest does or could exist. Thus, the practitioner must evaluate whether:

  • One client’s interests are directly adverse to another client’s interests;
  • There is a significant risk that the services to a client would be materially limited by the responsibility to provide services to another client (either current or former), to another person, or by the interest of the member or the member’s firm; or
  • A client or other appropriate party could consider the member’s objectivity impaired because of the client relationships that each holds with the member or the member’s firm.

List of Beneficiaries & Professional Relationships

Prepare a complete list of individual and or charity names, addresses, phone numbers, EIN or Social Security numbers. In addition, prepare a list of professionals you work with: CPA, attorney, financial adviser, etc. Often as professionals we forget to update our beneficiary information as our children age and family members pass away.


Estate planning documents should be designed with flexibility for your fiduciary to make decisions based upon circumstances that cannot be foreseen. A letter to the trustee is a good way to provide your fiduciaries with your values and wishes, especially as it concerns your children, and sensitive family matter that would not be documented in your estate planning documents. A letter to your trustee is non-binding, but can leave information for your trustee to provide peace to family members and or make sure your final expressions or love are communicated. 

A good source of advice may be someone in your firm or whom you’ve met at a CalCPA meeting. Don’t put off this important step; any estate plan can be revised. But you can’t revise the plan you never got around to establishing.

Jannette Brooks, CPA, CTFA is the founder of D4 Fiduciary, Business Advisory and Family Office Services.

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