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Sunday, January 13, 2013

Who should help an executor with estate tax returns?

A reader recently sent me the following question about who should be hired to prepare tax returns for an estate. It's a great question really, since we lawyer are always saying that executors should "hire an accountant" but not everyone knows where to turn.

Here's the question:

"What type of person should I be looking for to help me prepare terminal (and other tax returns) for my father who died last year? CA vs CGA vs CMA? I'm so confused."

I posted this question to my LinkedIn group called "Canadian Will and Estate Professionals" to see what the accountants in the group (and the other estate lawyers) would say about this. The general answer seems to be that an executor should look for a CA (Chartered Accountant).

However, every person who answered the post commented that the individual accountant's experience with estates and trusts is far more important than the letters after his or her name. I would agree with that.

In larger cities, you can get in touch with large accounting firms who have accountants working exclusively in different areas of tax, such as personal income tax, corporate tax, or estates/trusts. However, not everyone has access to a firm like that. When shopping for an accountant to help you with estate returns, ask how much experience the accountant has with estates. (Note that this is a different question than "do you do estate tax returns?")

You can also ask your estate lawyer for some names, as all of us work with accountants on our files on a regular basis.

One of the people who replied to my post suggested that executors avoid tax preparers, as opposed to accountants. This of course brought a reply from a tax preparer to counter that warning. My experience using tax preparers to work on estate returns hasn't been good. One of my clients who went to a tax preparer to have the deceased's terminal return prepared was told to "go away. You can't do a tax return for a dead person".

That of course was completely wrong; you can and should do tax returns for dead persons and their estates. This is why I agree with my colleagues' advice that the individual's experience is most important. Not all tax preparers are as poorly trained as the one that my client was unfortunate enough to encounter, by any means. Make sure you're comfortable with the expertise of the person to whom you trust your estate returns.


  1. The Individual tax return instructions and Individual tax return instructions supplements are print publications designed to help you to complete your individual income tax return.You should read the every instruction before filling the form.

    Individual Tax Return

  2. A qualified practioner (Accountant) is one who is licenced by their governing professional body to offer their professional services to the public.
    In the old days in Canada, such persons were referred to as CGA, CA, or CMA. However, going forward, all such persons will be referred to as CPA. (Chartered Professional Accountants).
    The Professionally qualified persons referred to above, licenced in Public Practice, are not allowed to take on an engagement to do work that they are not competent to do.
    In the same way that it would be less than prudent to hire persons without law society degrees and membership as ones lawyer, or persons without medical college degrees and membership as ones surgeon, one should apply the same criteria to one's tax acccountant.


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