Death of Your Accountant
Plan for Unforeseen Circumstances
Looking around conference crowds and professional development workshops, I can attest that many public accountants are approaching retirement. I don't need statistics to tell me that there will be a large group of professionals retiring in the next 10-15 years. I suggest having a contingency plan if your accountant is approaching retirement, experiencing health issues, or even in the event of unexpected death.
Your financial plans often reside with your accountant, including tax planning information for retirement, estate planning, and the passing of family members. Your family's financial history is also typically kept with your accountant, including the values of inherited assets, cost base of recreational land purchased long ago, past investment losses, and any claimed principal residence exemptions.
In British Columbia, the Chartered Professional Accountants of BC (CPABC) requires that all sole practitioners either name an Assistant Accountant or give CPABC the authority to assign one in times of emergency. This provides clients with the access to their information and allows for a smooth transition to a new accountant. Regardless, the client is not likely to obtain needed information right away. The CRA may not determine the death of your accountant sufficient reason to waive late-filing penalties or interest, so taking steps to minimize any disruption is advisable.
Steps to take with your current accountant now:
- Keep electronic versions of the following documents: All of your returns going forward and as far back as possible, tax notice of assessments, brokerage statements, and real estate purchases. Store the records in a safe and secure location.
- Talk to your accountant about their backup plan in case of incapacity. Don't be shy. A responsible accountant will have a plan in place and will be happy to share it with you.
- If your current accountant is approaching retirement or is in poor health, start interviewing a new accountant while your current accountant is able to assist fully in the transition process. Your current accountant should understand why this is important for your financial future.
Steps to take if your accountant becomes incapacitated or dies:
- Call CPABC to notify them of your circumstances. Ask for the name and contact information of the Assistant Accountant. Reach out to the Assistant Accountant to discuss your circumstances to ensure your information is compiled in a timely manner.
- Call the CRA to obtain any pertinent information, such as past tax-filing information.
- Find another accountant as soon as possible and file on time.
Preparing for unforeseen circumstances can help mitigate and minimize any inconvenience in the future and protect your financial health.
