Probate and the Tax Professional
Once again, I find myself disclosing why you should read this series of articles with the understanding that this is not to be considered either Legal or Accounting Advice as I am but a mere mortal REALTOR who has earned the Certified Probate Real Estate Specialist (CPRES) designation and am only qualified to assist with the sale of real estate. Fortunately, I am qualified to help with all matters of real estate while in the probate process. This series of articles is intended to be nothing more than a brief overview of what can be expected and identifying who the prominent players are in the process. I have a passion for my role as a CPRES, having compassion for those involved after losing my own mother 10 years ago and my wife 2 years ago. I have gone through, personally, much of what I discuss. What I haven’t experienced firsthand, I can assure you I have seen unfold before me with clients, friends and acquaintances. Bottom line, Probate is a tough thing to deal with it – but deal with it we must.
Probate is a process that typically will take up to a year and a half in California; longer in some states and less time in others. In the last article, we discussed how to go about finding a good attorney – whether it is to help with portions of the process or to act as a Sheppard and seeing the process through every step of the way from the beginning to the very end.
Professionals in any discipline, i.e. law, accounting, tax, real estate, should be just that: PROFESSIONALS.
In my real estate business, I have said for years that “All Real Estate is Local . . . and Your REALTOR should be too!” This is so true with nearly every Professional in the probate field. While it does not matter where a financial advisor is located, so long as they are licensed in your state – this is not true with Probate Professionals.
Consider that every Probate must be filed in the County where the deceased lived, at the time of death and consider that each jurisdiction has its own unique policies and procedures. Therefore, selecting an Attorney, Tax Professional or REALTOR from the community the Executor lives in, may not be very wise.
For one, consider the travel time. Living in the Inland Empire region of Southern California, most PRs here travel, on average, 2 hours to come to the decedent’s home. Do you want to pay your attorney for that sort of travel time, each time an appearance in necessary? A local lawyer will be up-to-date on local forms, policies and procedures. Same goes with a tax professional. While an EA (Enrolled Agent) can certainly take care of Federal tax matters from anywhere – it’s hard to imagine they can truly be an expert with all of the local/state requirements imposed on an Estate. Without sounding self-serving – the same truth reflects on the REALTOR ultimately chosen to liquidate the real property of the estate.
The Tax Professional
Unless you are extremely comfortable with the tax code or the estate you are administrating is very basic, it is usually wise to hire a professional negotiate this critical aspect of the Probate to ensure it is always in compliance with tax law and accounting rules.
Both CPA’s and EAs are qualified (if they specialize in this narrow field) to assist with Trusts and Estates. While a CPA may have higher credentials allowing for a more general role in Public Accounting, an EA specializes in taxes and when properly trained, may do just as good a job as a CPA and competently perform any accounting function required. Regardless of your choice, both as subject to rigorous regulations and must participate in annual continual education.
When looking for a tax professional, unfortunately, there is not a national database as there is for attorneys. My first suggestion is to seek a referral from either other trusted professional or other acquaintances that have experienced the process. I find referrals by networking to be an amazing and invaluable tool – regardless of the profession being sought out.
Every State will have a Licensing Board as well as a Professional Association. EAs will belong to their National Association – the National Association of Enrolled Agents (NAEA) as well as State and Local Associations.
When this series continues, I’ll be discussing my role as a REALTOR in a Probate and why it is important to utilize the services of a REALTOR who actually understands the ins and outs of a real estate transaction while a home is in Probate.
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