Accountant’s checklist when a client or family member faces imminent death

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Accountant’s checklist when a client or client’s family member is facing imminent death

When a client or their family member faces imminent death, it is important for the family’s financial adviser to be ready with a concise support in this difficult moment. While it may be tempting to leave these matters alone at this time, this may be harmful in the longer term.

This list is a compilation of ideas from other accountants (some phrases copied verbatim without credit) that was published as part of an online discussion. As such, it should be considered a work in progress rather than a complete checklist. Note that references to “he” or “she” might be changed based on the circumstances.

  • Make sure that the spouse keeps a copy of the other spouse’s SS card and marriage certificate (preferably a certified copy) for use when the surviving spouse applies for SS survivor benefits.
  • Keep copies of these documents in a safe or safe deposit box, along with a copy of final joint return for documentation as well.
  • If there are any “final actions”, make sure that he is videoed to prove that he was mentally competent to take those actions.
  • If not mentally competent, make sure that he has a durable power of attorney ALREADY that allows his POA to invoke those activities.
  • If survivor does not roll over IRA, then she can make “early distributions” from an INHERITED IRA before 59 1/2 without being subject to the 10% penalty.
  • If she rolls it over into her IRA, she loses this eligibility.
  • Make sure that the surviving spouse updates all of her “estate related documents” to replace the decedent with living representatives and beneficiaries.
  • If there are accounts in the ill taxpayer’s name only, then she will get a step up in basis to current FMV.For PA, his estate will be taxed at -0- rate since his wife is his beneficiary.
  • Make sure that surviving spouse files a federal form 706, even if not required. This preserved the portability of the estate to the surviving spouse.
  • Consult with them on several topics surrounding their estate plan. This is a stressful time and your advice, counsel, and support will be very helpful and much appreciated.
  • POA documents should be updated by their attorney and should include health care representative language for HIPAA compliance.
  • Will should be updated
  • Retirement plan primary and contingent beneficiary designations should be updated
  • IRA primary and contingent beneficiary designations should be updated
  • Group Insurance primary and contingent beneficiary designations should be updated
  • Private or personally obtained life insurance primary and contingent beneficiary designations should be updated
  • Please involve yourself in discussion with them about IRA-BDA. (Beneficiary Designated Account). That is, don’t let the survivor roll over any IRAEventually you will want to evaluate how to maximize the 2013 tax filing in that it may be the last MFJ year to be filed – so Roth conversion, for examples, might be a consideration.
  • Be supportive.

Thanks to my fellow PAICPA members for contributing many of these suggestions.


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