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CPA to monitor attorney-in-fact (formerly "When does CPA tax-return rush start?" in "Other Tax Questions" forum))
Posted by: wanttoknow, January 6, 2014 07:08AM
(continuation from "When does CPA tax-return rush start?" thread in "Other tax questions" forum)

Thanks so much, MadDog, for your interest.

This was my attorney's recommendation, and I would basically just be presenting this whole thing to the CPA as my attorney explained it.

The financial attorney-in-fact will be a state-licensed professional fiduciary (an individual) because I have no relatives or friends I feel I can call upon to take on any responsibilities of any kind when I become incapacitated.

My attorney will serve as what she calls a "healthcare protector", monitoring my welfare and the activities in this regard of both the financial attorney-in-fact and the geriatric care manager I am designating.

She (my attorney) wants a CPA to handle the financial aspect of the monitoring. She refers to this as analogous to what she calls a "trust protector", although the CPA wouldn't be scrutinizing my trust. The financial attorney-in-fact would be required to submit regular financial reports to the CPA, and the CPA would be responsible for questioning anything that doesn't look right, and would have the power (perhaps in conjunction with my attorney) to replace the financial attorney-in-fact. It wouldn't just be malfeasance, but also mismanagement. The latter, if challenged in any serious way, would probably just resign (according to my attorney).

I do not have any ongoing relationship with a CPA, so asked for my attorney's recommendation. The person she recommended is someone I think she has worked with. I will be approaching him, but he is apparently about 60 years old, and because of my present good health and a history of family longevity, I feel I need to find an alternate who is much younger.

I should add that my investment portfolio will be managed by the Vanguard National Trust Co., who will be instructed to release funds to the financial attorney-in-fact upon his/her request and keep him/her informed on the $ amount of the assets.

Concerning your comment: "Perhaps you could require the POA to submit invoices to the firm and have the firm cut checks, but there would need to be some other party to adjudicate concerns about the size and purpose of checks to the POA (or some party that may be related to the POA), such as your attorney."

By "the firm" do you mean the CPA? If so, then wouldn't the CPA be serving as attorney-in-fact for me? In general, in this state (California) any individual serving as attorney-in-fact for more than three people must be state-licensed as a professional fiduciary, so it is unlikely any CPA not so licensed would be engaged in such a business. I would be reluctant to entrust one licensed professional fiduciary with monitoring another.

Why would it be so difficult to "find a CPA who would accept an engagement the purpose of which is to monitor misappropriation of funds by a POA"?

Of if I could, what would make it so expensive?

Re: CPA to monitor attorney-in-fact (formerly "When does CPA tax-return rush start?" in "Other Tax Questions" forum))
Posted by: MadDog, January 6, 2014 11:41PM
I would see 2 problems. First, this is a very unusual area of practice for a CPA to undertake. I do not personally know any CPAs who act in this capacity and I am a CPA who knows many other sin my state and other states. So there is the basic ethical issue of not undertaking work that you are not competent to do. (This would involve monitoring the trustee in his role as a fiduciary and based on the terms of the trust). I do understand that this has the potential to be a growth practice niche, but the CPA would have to want to develop a niche that involved more than your scenario. Second, there is an issue of whether the CPA's malpractice carrier would cover this service, particularly as a one shot deal. So I think you woul dneed to get someone who has this as an existing niche area and you would simply be added to the stable of clients. There was an article in the Journal of Accountancy in 2007 (this is provided to all membrs of the AICPA) from soemone in CA who may well offer this service, but I do not think the idea he espoused in the article really took off. See this link:

[www.journalofaccountancy.com]


Re: CPA to monitor attorney-in-fact
Posted by: wanttoknow, January 7, 2014 03:44AM
MadDog,

My, what an interesting conundrum!

Right now the press of something else prevents me from absorbing and responding to everything you've communicated . . . but just a few comments in the meantime:

Would it make a difference if the CPA just provided my attorney with his/her analysis, and the attorney was the one who took any action?

I made the same query online to a local group of people to which I belong, and one of them asked a CPA she knows, and the CPA said the following: " . . . the CalCPA Peninsula Silicon Valley chapter has a personal financial planning committee and may know the CPAs that specialize in this elder care area. I am thinking of (3 names), for ideas on who does this service."

I asked for some guidance via the "Ask a CPA" resource on the website of the California CPA organization (CalCPA); if they decide to respond, they will publish it on their website, but so far I haven't seen anything.

Unfortunately the C.P.A. whose article you sent isn't anywhere near where I am.

I'll get back to you again on this soon.

Re: CPA to monitor attorney-in-fact (formerly "When does CPA tax-return rush start?" in "Other Tax Questions" forum))
Posted by: Drewremedy, January 8, 2014 02:04PM
As an aside you may be setting yourself up for some hefty fees billed at hourly rates. And unless you have a written agreement as to fees you you be subject to the prevailing winds..

I understand your concerns..but watch out for overkill.x

Re: CPA to monitor attorney-in-fact (formerly "When does CPA tax-return rush start?" in "Other Tax Questions" forum))
Posted by: wanttoknow, January 8, 2014 07:41PM
Thanks, Drewremedy.

I'm concerned about this too. But I'm wondering how there can be a written agreement about fees, when the fees may not be incurred for many years.

This whole thing is fraught with expense and risks, but I see no way around it.

Re: CPA to monitor attorney-in-fact (formerly "When does CPA tax-return rush start?" in "Other Tax Questions" forum))
Posted by: cpw, January 8, 2014 10:19PM
I think you may be looking in the wrong place...I wouldn't ordinarily expect a "regular" attorney or CPA to "kluge-up" what you want, ie, create an "aggregate" executor/agent for your will and medical/financial durable powers of attorney. I suspect that there are stand-alone firms/partnerships out there, however, that do just that....you're not the first person with your problem. These "geriatric care" groups probably have their own lawyers, CPA, doctors, etc. I'd contact some senior care specialists (geriatric doctors, retirement homes, even Alzheimer's/hospice/hospital facilities) and ask them how situations like yours are typically administered.

Re: CPA to monitor attorney-in-fact (formerly "When does CPA tax-return rush start?" in "Other Tax Questions" forum))
Posted by: wanttoknow, January 9, 2014 03:12AM
cpw,

What do you mean by "regular" attorney?

Isn't it the normal work of trust/estate and elder-law attorneys to create the instruments to handle both incapacity and distribution of the estate?

What would be the role of a doctor in the sort of "geriatric care group" to which you refer?

Re: CPA to monitor attorney-in-fact (formerly "When does CPA tax-return rush start?" in "Other Tax Questions" forum))
Posted by: Sven, January 9, 2014 03:35AM
Matchmaker, matchmaker make me a match.... Maybe it's my TTaxpayer Mingle" gene coming out but there is out there a fairly regular Doctor/Lawyer poster who raises very interesting, sophisticated issues. I have the feeling he may be chronologically advanced enough to share many of the concerns about aging being discussed here. I only throw this out because the last post raised what is the role of a doctor in some kind of Eldercare Troika.

Re: CPA to monitor attorney-in-fact (formerly "When does CPA tax-return rush start?" in "Other Tax Questions" forum))
Posted by: Sven, January 9, 2014 03:37AM
Matchmaker, matchmaker make me a match.... Maybe it's my Taxpayer Mingle" gene acting out but there is out there a fairly regular doctor/lawyer poster who never fails to raise interesting, very sophisticated issues. I have the feeling he may be chronologically advanced enough to share many of the concerns about aging being discussed here. I only throw this out because the last post raised what's the role of a doctor in an Eldercare Troika. A doctor, a lawyer and a CPA walked into a nursing home......

Re: CPA to monitor attorney-in-fact (formerly "When does CPA tax-return rush start?" in "Other Tax Questions" forum))
Posted by: cpw, January 9, 2014 03:49PM
WTK...the attorney creates the instruments, but more often than not, does not administer them.

I'd rather have a doctor make an end-of-life decision than a lawyer or CPA (their fees will cease if you're dead).

Some info here: [www2.nycbar.org]

Re: CPA to monitor attorney-in-fact (formerly "When does CPA tax-return rush start?" in "Other Tax Questions" forum))
Posted by: Drewremedy, January 10, 2014 10:34PM
How big of an asset pot is in this equation.

$50 million and up?

Re: CPA to monitor attorney-in-fact (formerly "When does CPA tax-return rush start?" in "Other Tax Questions" forum))
Posted by: wanttoknow, January 19, 2014 04:56AM
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