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Accountants – Tax and Estate Planning

Dealing with Toxic Succession Issues

Estates with real property assets are at risk.  Certain of these properties may be contaminated with gasoline, chemicals or pesticides, resulting in potentially drastic consequences as these contaminated properties are passed to heirs or successors at death (toxic succession).  Tax and estate planning accountants have a unique opportunity – and a responsibility – to help their clients identify and deal with potential toxic succession issues.

Contamination of real property can occur from any of numerous commercial, industrial or agricultural sources, including gasoline service stations, dry cleaners, chemical or pesticide storage, and manufacturing operations.  The contamination can impact both soil and groundwater, and can lead to liability for potentially catastrophic cleanup costs associated with the contamination.

When contaminated properties are passed at death, the environmental cleanup liabilities are often transferred to the new owners, including business partners, heirs, beneficiaries or charitable organizations.  The same property or business that your client intended to be a valuable endowment can result in a costly, challenging environmental disaster.

Accountants should be prepared to provide estates with access to tools and services necessary to identify and address potential toxic succession issues, including a) proactive toxic succession planning, and b) a periodic review of client assets.  By intervening early and getting strategic assistance from toxic succession professionals, accountants can help their clients avoid potentially serious environmental cleanup problems.

Resources:
Campaign 5000: Toxic Succession Whitepaper
Planned Giving Today article by Kevin Daehnke
Contaminated Property: Proactive Planning Strategies to Maximize Estate Value and Avoid Draconian Results
Environmental Cleanup Costs: Professional Negligence for Failure to Warn Successors and Beneficiaries