An Estate Should Hire an Accountant Sooner Rather Than Later.
I take this opportunity to draw once again on the wealth of knowledge and assistance that I receive from Ms. Estelle Weiler CPA, CA, CEA (Certified Executor Advisor) of Calvin G Vickery CPA Professional Corporation. She is my go-to person for any Estate tax related questions and I am not the only Wills and Estates lawyer to rely on her.
I recreate with her kind permission a recent email exchange between us. In it I covered why I had correctly for some time urged my Estate Trustee (Executor) clients to hire an accountant as soon as possible and why at times my client’s receive the wrong advice. My incorrect assumption about the GRE is a faux pas I readily admit. For more information on what a GRE is see our blog titled A TAX PRIMER FOR ESTATES.
I had wrongly assumed one had to elect to take advantage of the GRE within 6 months of death. Estelle responded as follows.
I have also confirmed with CRA that even if you file an estate tax return many years late, you will always be able to elect it as a GRE for the first 36 months of the estate that you file estate tax returns for. So the accountants win on that front.
Personally though, I like being notified and being involved soon after death. I like to send an authorization request with CRA early so that I will have online access to the CRA account of the deceased when I prepare the tax return later – you can find out a whole lot more when you have online access and there is more to preparing a terminal return than just gathering slips. Authorizations for deceased individuals can take months for CRA to process. Some other information, like anything to do with details of a 1994 capital gain election, has to be requested from CRA and they will send it to you by mail. So if you wait until tax season you may not get authorized in time and you may be missing important tax information when you prepare the return. So I do not like it when estate clients wait until tax season for the first contact. “No rush, see me next year” sounds a bit too relaxed to me.
So, I think your advice to retain an accountant early on is great advice, it is just the reason you give for doing so that has to change.