bonus: a sample engagement letter.
by ed mendlowitz
the 卡塔尔世界杯常规比赛时间 practice doctor
there are two distinct types of elder care assurance services.
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one service is the complete financial care and oversight of elderly clients. these could be relatives of the people retaining us, or the elderly person themselves. the other service is consulting on the financial planning and tax needs of the elderly person.
elder care is a service that we have seen being introduced to the practice by the tax department. that is probably because it is the tax preparer who has the closest relationship with the non-regular business clients.
who needs this service
anyone with an elderly parent or relative they care for, or worry about, is a potential user of this service. also some elderly clients can be converted to this service if they are simply made aware of its existence.
why the accountant is suited to offer this service
people tell us everything, and i mean everything, since they feel there might be a tax benefit lurking somewhere. if we are attentive, we usually develop a database of vast knowledge about clients. offering to help can be a great service for the client.
we find that most of the skills needed for elder care services are right in line with those regularly being done by accountants. these skills include basic writeup services, bill paying and investment tracking. the sample engagement letter at the end of this post lists many of the services employed; you could see which ones you feel qualified to do – probably most of them.
our elder care services even have included arranging for a client’s cat to go to the vet.
introducing the client to the service
clients can be asked very simply if they have considered having someone perform these services for their family member or themselves. we usually provide them a draft of the engagement letter and call them after tax season to ask if they wish to discuss how we could better serve them.
many older clients get lazy, careless or impatient with their paperwork and bill paying. we can usually spot when the way they provide us with their tax information changes, and declines. when we suggest that this service is available many express interest, and request that we follow up after tax season. with these clients we do not wait; we try to speak to them as soon as we complete their tax returns (which then becomes a priority).
finalizing the engagement
fees are usually based on an hourly rate and a fixed monthly supervisory fee. after we’ve had the client a while and the work routine can be anticipated, we consider setting a fixed monthly fee. we bill at our standard billing rates for any accounting or other services that might be performed. services that are billed at standard rates would be anything not specifically stated in the engagement letter.
sample engagement letter for elder care assurance engagement
note that this letter lists the types of services we will perform for these clients and you can use this as a checklist.
date
ms. daughter
street address
city, state zip
dear ms. daughter,
we are looking forward to working with you to coordinate and oversee the financial care of your mother, mrs. mother. we know your mother’s financial care is important to you, and our service is designed to provide you with the comfort of knowing that her needs are being met. this letter highlights the steps involved in developing, implementing and maintaining a financial care program for your mother. it also outlines, in general, our understanding of the terms and objectives of our engagement. the sufficiency of the procedures is solely your responsibility. consequently, we make no representation regarding the sufficiency of the procedures.
services to be performed
following is a listing of some of the services we will perform on a regular basis. we will generally perform all financial and “paperwork” type of services your mother would need.
- we will collect all her bills and ascertain their validity and accuracy.
- we will write and mail checks for payments due by your mother in a timely manner. generally we will review all items due on a weekly basis and perform whatever is necessary. checks for amounts in excess of $1,000 with the exception of the monthly rent, real estate taxes, income taxes and estimated tax payments will not be signed by us without your written approval.
- we will review income mrs. mother is supposed to receive and ascertain that it is received or deposited on time. this will include the social security checks, ira withdrawals and cd interest income and rollovers, and any other income mrs. mother usually receives or should receive.
- we will review receipts for prescriptions and other medical expenses and prepare the necessary aarp forms for reimbursements and follow up on their payment.
- we will maintain files of the original invoices and receipts in our office.
- we will send you monthly a listing of all disbursements and receipts along with copies of all invoices and bills. this will generally be sent during the first week of each month.
- we will send you copies of all bank reconciliations monthly when they are prepared, usually within one week of receiving the bank statements, along with a copy of the bank statements.
- we will reconcile all brokerage and fund accounts and send copies to you. we expect that you will receive copies directly from the brokerage firms and mutual funds, if applicable.
- we will discuss with you the types of investment alternatives as funds become available. we will provide suggestions but will not make any direct decisions, nor will we have signatory power over any investment accounts. we have some ideas on how the accounts could be maintained, particularly cds, at a secure low-cost, low-maintenance, low-effort basis. we will discuss this with you when the first situation arises.
- telephone calls to you or your mother as necessary.
- we will always have available for your review a year-to-date general ledger. we will print them as you request. generally, we will only send these to you at six-month intervals.
- we will prepare whatever information you might need to prepare your mother’s tax returns.
- we will not be responsible to prepare any tax returns, but will pay the estimated taxes if applicable.
- we expect you to have a checking account where we could sign the checks. this account should have an initial balance equivalent to about two months of expenses. as the balance declines you would replenish it.
- we will not deposit any income into this account. rather, all income will be deposited into accounts that you control and where we are not signatories. the only exception might be the automatic deposit of your mother’s social security checks.
- initially, we will write the checks on existing accounts and send them to you or bring them to your mother to sign.
- we will use quickbooks and quicken software for these services. the versions we will use will be owned by us and will not be billed to you, unless the software providers change their policy and require us to purchase separate software packages for use in our servicing your mother’s work. we intend to order preprinted checks and these will be billed to you. initially, we will print a limited number of checks in our office for you so that there is no delay in getting started.
all disbursements we make will be subject to the approval and other controls we have established. however, in making those disbursements, we will be relying on the accuracy and reliability of information provided. we will not audit, examine or review the information.
please also note that our services cannot be relied on to disclose errors, fraud or other illegal acts that may exist. our firm’s maximum liability to you for any reason relating to our services under this letter shall be limited to fees paid to our firm for our services under this letter. in addition, you will indemnify and hold harmless our firm and its personnel from any claims, liabilities, costs and expenses relating to our services under this letter, except to the extent finally determined to have resulted from the gross negligence or willful misconduct of our firm.
professional standards preclude us from disclosing client information without your specific consent. however, as a cpa in good standing with the states of new jersey and new york, and as members of the aicpa, we have a routine triennial peer review of our procedures, policies and standards. by your retaining us it is recognized that your files might be selected for such review.
fees
our fee will be on an hourly basis at $xx per hour, plus a fixed supervisory fee of $xxx per month, for all routine work as described above, and $xxx per hour for the type of work that involves discussions with a partner or accounting staff regarding decisions that need to be made such as where the cds will be rolled over to, or the term of the cds, or other investing decisions. we will record our time in half-hour segments. we will also bill you for out-of-pocket disbursements such as postage and excessive copying charges. if you wish, we could discuss a monthly fixed fee after we establish a routine, which usually takes about two months.
financial and estate planning services are available. the rates for this are $xxx per hour and will be performed by a partner. we may occasionally have preliminary discussions with you regarding these types of services or the need for them, which will be billed at the $xxx per hour rate. however, if you wish to proceed we will then bill you at the $xxx rate. please note that the $xxx rate will not be billed unless there is a specific engagement for such services, and there is an appropriate engagement letter agreed to by you. until then, you will not be liable for that rate.
our invoices for these fees will be rendered monthly and are payable on presentation. we will prepare the checks and will include copies along with the other bills we paid. we will always be available to discuss our charges, should you have any questions.
you or we may terminate this engagement at any time, upon written notice. during the course of our providing services, disagreements may arise between you and mrs. mother. it is our understanding that you and mrs. mother will resolve such disagreements, and that the resolution will be communicated to us.
cordially,