Wills and estates
Content Summary
Is this role right for you?
Accountants are increasingly being approached to be named as an executor for their client’s future estates. While often initially considered to be an honour, accountants are increasingly regretting this decision when they’re confronted with the role of administering their former client’s deceased estate.
Claims against accountants
Here are some examples of real-life claims made against accountants;
- A sole practitioner was appointed as one of three trustees to a large multi-million-dollar estate. Due to a conflict between one trustee and the investment portfolio, the trustees were dragged into a significant litigated settlement with the beneficiaries of the estate.
- An accounting firm, with a long and close relationship with their client, were ultimately accused of overstepping the mark of an executor in relation to running the estates’ ongoing businesses.
Three questions before administering an estate
The three main questions accountants need to consider before administering an estate are:
- Will your professional indemnity insurance cover this?
- Can you recover your time?
- Can you charge for your work?
The top three risks when administering an estate
The main causes of difficulty for accountants when administering an estate include:
- failing to seek advice
- seeking advice from a non-specialist, resulting in flawed advice
- drafting wills for clients either directly or indirectly, such as through an online service (this is a costly risk to reputation and the hip pocket for non-legally qualified professionals).
Ensure you understand your personal liability, exposure and responsibilities in this area.
Information and resources
Here are some more useful resources about accountants as executors.
- Taxation law
ATO modifies its stance on access to deceased's taxes
The ATO amends a change it initiated about disclosing a deceased person’s pre-death tax affairs.
CPA Australia
ATO modifies its stance on access to deceased’s taxes.
Australian Tax Office
ATO PCG 2018/4: Income tax liability of a legal personal representative of a deceased person.
Accountants as executors: Does it add up?
It can be an honour to be asked by a client to take on the role of executor but before accepting, accountants should consider the significant challenges it poses.
PublishedKaterina Peiros TEP and Ian Raspin FCPA, TEPVisit INTHEBLACKSay no to being an executor and still keep the client
Being offered executorship by a client is an honour but sometimes it is in an accountant’s best interests to maintain some distance.
PublishedKaterina Peiros TEP and Ian Raspin FCPAVisit INTHEBLACK
Library resources
The following title is available for members to borrow from the CPA Australia library. You’ll need an online account with us to access these resources.
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