Including a letter of instruction in your estate plan is a simple yet powerful way to communicate your personal wishes to your family and executor outside of formal legal documents. While not legally binding, the letter can serve as a road map to help those managing your estate carry out your wishes with fewer questions or disputes.
Contents of your letter
What your letter addresses largely depends on your personal circumstances. However, an effective letter of instruction must cover the following:
Documents and assets. State the location of your will and other important estate planning documents, such as powers of attorney, trusts, living wills and health care directives. Also, provide the location of critical documents such as your birth certificate, marriage license, divorce documents and military paperwork.
Next, create an inventory — a spreadsheet may be ideal for this purpose — of all your assets, their locations, account numbers and relevant contacts. These may include, but aren’t necessarily limited to:
Don’t forget about liabilities. Provide information on mortgages, debts and other loans your family should know about.
Digital assets. At this point, most or all of your financial accounts may be available through digital means, including bank accounts, securities and retirement plans. It’s critical for your letter of instruction to inform your loved ones on how to access your digital accounts. Accordingly, the letter should compile usernames and passwords for digital financial accounts as well as social media accounts, key websites and links of significance.
Funeral and burial arrangements. Usually, a letter of instruction will also include particulars about funeral and burial arrangements. If you’ve already made funeral and burial plans, spell out the details in your letter.
This can be helpful to grieving family members. You may want to mention particulars like the person (or people) you’d like to give your eulogy, the setting and even musical selections. If you prefer cremation to burial, make that abundantly clear.
Provide a list of people you want to be contacted when you pass away and their relevant information. Typically, this will include the names, phone numbers, addresses and emails of the professionals handling your finances, such as an attorney, CPA, financial planner, life insurance agent and stockbroker. Finally, write down your wishes for any special charitable donations to be made in your memory.
To learn more, contact your Smolin representative.
Choosing an executor is one of the most important decisions in the estate planning process. This person (or institution) will be responsible for carrying out your wishes, managing assets, paying debts and taxes, distributing property to beneficiaries and more.
Your first instinct may be to name your spouse, adult child or other close family member as executor. While that decision may feel natural, it’s not always the best choice. Co-appointing a professional advisor alongside a trusted family member can provide a more effective and balanced solution.
Your executor has a variety of important duties, including:
For someone without financial, legal or tax expertise, these responsibilities can feel overwhelming — especially while grieving. Even highly capable family members may lack the time or experience needed to administer an estate efficiently.
Mistakes can result in delays, disputes or even personal liability. Executors are legally responsible for acting in the best interests of the estate and its beneficiaries. If errors occur — such as missed tax deadlines or improper distributions — the executor may be held accountable.
When a family member serves as sole executor, emotional tensions can arise. Sibling rivalries, blended family dynamics or disagreements about asset values can quickly escalate.
Even when everyone has good intentions, beneficiaries may question decisions about timing, asset sales or expense payments. The executor may feel caught between honoring the deceased’s wishes and preserving family harmony. Needless to say, these situations can strain relationships, sometimes permanently.
A practical alternative is to name both a trusted family member and a professional advisor, such as a CPA, estate planning attorney or corporate fiduciary, as co-executors. This structure can offer several key benefits, such as:
Technical expertise. A professional advisor can bring knowledge of tax law, probate procedures, accounting requirements and regulatory compliance. This reduces the risk of costly mistakes and helps ensure deadlines are met.
Objectivity. A neutral third party can help mediate disagreements and make decisions based on fiduciary standards rather than emotions. This can protect family relationships and minimize conflict.
Shared responsibility. Administering an estate can be time consuming. Dividing responsibilities allows the family member to focus on personal matters while the professional handles technical and administrative tasks.
Continuity and stability. If a family member becomes overwhelmed, ill or otherwise unavailable, a professional co-executor can provide continuity. Estates often take months — or even years — to settle.
Co-appointing a professional doesn’t mean excluding family involvement. In fact, it often enhances it. The family member remains involved in decision-making and ensures that your personal wishes and family values are honored. Meanwhile, the professional ensures that legal and financial matters are handled efficiently and correctly.
For larger or more complex estates — such as those involving business ownership, multiple properties or significant investments — this collaborative model can be especially valuable. Contact a Smolin representative if you have questions about having co-executors or choosing them.
Missing direct deposit information could delay your tax refund by six weeks or more.
The IRS has begun issuing CP53E notices to taxpayers who requested refunds but did not include bank account information for direct deposit on their 2025 Form 1040.
When bank information is missing from Form 1040, the IRS must issue a paper check instead of a direct deposit, resulting in significant refund delays and unnecessary follow‑up.
If you are expecting a refund, be sure your bank account information is included when your tax return is prepared. Direct deposit is the fastest way to receive your refund. Additionally, always review your Form 1040 carefully to ensure accuracy.
To learn more about CP53E notices and how to avoid refund delays, visit Understanding your CP53E notice.
Married couples have a choice when filing their 2025 federal income tax returns. They can file jointly or separately. What you choose will affect your standard deduction, eligibility for certain tax breaks, tax bracket and, ultimately, your tax liability. Which filing status is better for you depends on your specific situation.
In general, you should choose the filing status that results in the lowest tax. Typically, filing jointly will save tax compared to filing separately. This is especially true when the spouses have different income levels. Combining two incomes can bring some of the higher-earning spouse’s income into a lower tax bracket.
Also, some tax breaks aren’t available to separate filers. The child and dependent care credit, adoption expense credit, American Opportunity credit and Lifetime Learning credit are available to married couples only on joint returns. And some of the new tax deductions under 2025’s One Big Beautiful Bill Act (OBBBA) aren’t available to separate filers. These include the qualified tips deduction, the qualified overtime deduction and the senior deduction.
You also may not be able to deduct IRA contributions if you or your spouse were covered by an employer-sponsored retirement plan such as a 401(k) and you file separate returns. And you can’t exclude adoption assistance payments or interest income from Series EE or Series I savings bonds used for higher education expenses if you file separately.
However, there are cases when married couples may save taxes by filing separately. An example is when one spouse has significant medical expenses. Medical expenses are deductible only to the extent they exceed 7.5% of adjusted gross income (AGI). If a medical expense deduction is claimed on a spouse’s separate return, that spouse’s lower separate AGI, as compared to the higher joint AGI, can result in a larger total deduction.
If you got married anytime in 2025, for federal tax purposes you’re considered to have been married for all of 2025 and must file either jointly or separately. And married filing separately status isn’t the same as single filing status. So you can’t assume that filing separately for 2025 will produce similar tax results to what you and your spouse each experienced for 2024 filing as singles, even if nothing has changed besides your marital status — especially if you have high incomes.
The income ranges for the lower and middle tax brackets and the standard deductions are the same for single and separate filers. But the top tax rate of 37% kicks in at a much lower income level for separate filers than for single filers. So do the 20% top long-term capital gains rate, the 3.8% net investment income tax and the 0.9% additional Medicare tax. Alternative minimum tax (AMT) risk can also be much higher for separate filers than for singles.
If you and your spouse file a joint return, each of you is “jointly and severally” liable for the tax on your combined income. And you’re both equally liable for any additional tax the IRS assesses, plus interest and most penalties. That means the IRS can come after either of you to collect the full amount.
Although there are “innocent spouse” provisions in the law that may offer relief, they have limitations. Therefore, even if a joint return results in less tax, some people may still choose to file separately if they want to be responsible only for their own tax. This might occur when a couple is separated.
These are only some of the factors to consider when deciding whether to file jointly or separately. Contact a Smolin Representative to discuss the many factors that may affect your particular situation.
Welcome to the first edition of Follow the Money—my new monthly series on the real world of forensic accounting. After years spent sifting through ledgers, bank statements, and the occasional financial garbage bag disguised as bookkeeping, I’ve come to appreciate just how much finding a single transaction or small series of transactions can change the direction of an investigation. This series is designed to share some of my professional real-life lessons: practical techniques, patterns that repeat across industries, and financial behavior that often says more than a witness.
For this opening article, I want to start with an issue that sits at the core of many disputes: Hidden Transactions. These aren’t simple mistakes or sloppy accounting. I am talking about deliberate, deceptive financial moves designed to hide certain transactions and assets. Finding such evidence can transform a routine disagreement into something far more serious.
When the Transactions Tell a Different Story
Long before any issues surfaced publicly, Crazy Eddie appeared to be a growing and successful retail operation. Stores were expanding, sales were growing, and the company’s financial results seemed to support the growth and strength. What wasn’t visible was that cash was steadily being taken out of the business through sales that were never recorded.
As the company later positioned itself to go public, that earlier activity began to surface in a different form. Money that had previously been pulled out was routed back through foreign accounts and related entities, eventually reentering the company in ways that appeared legitimate on the books.
Viewed in isolation, none of these transactions drew much attention. The issue only became clear once investigators reconstructed the flow of funds and analyzed; where the money originated, how it moved, and why those movements occurred when they did. At that point, the reported financial performance no longer aligned with economic reality. What began as a routine securities review expanded into a far more serious fraud investigation that ultimately brought the entire company down.
That dynamic—where a pattern of seemingly ordinary transactions reshapes the entire understanding of a case—is something I see repeatedly in modern disputes.
What Exactly Are Hidden Transactions?
At its core, hidden transactions are financial activities that are intentionally structured to avoid detection. These might show up as:
One case that illustrates that and sticks with me involved a partnership dispute where everything looked perfectly normal—until we noticed a recurring payment labeled “subscription” to a vendor that, as it turned out, didn’t exist. The “vendor” entity had been formed three months earlier and dissolved quietly after the payments stopped. This forensic finding changed the entire direction of the case.
This scenario also illustrates how hidden transactions surface: often not with a dramatic revelation, but with a minor inconsistency, which, when investigated further, doesn’t line up with the story the numbers are supposed to tell.
Why Hidden Transactions Matter in Litigation
When a hidden transaction comes to light, it rarely stays isolated. Proverbially, if you see one cockroach, there are others! In my experience, these initial discoveries lead to:
Here is an illustration of a hypothetical scenario that mirrors situations I’ve investigated. A manufacturer suspects overbilling by a long-time supplier. The general ledger doesn’t show anything out of the ordinary. But once we trace the payments further, we find a pattern of rebates funneled back to a few executives through related vendors. Suddenly, the case is no longer about billing errors—it’s a deliberate kickback scheme.
How We Trace What’s Meant to Stay Hidden
Forensic accounting isn’t about having one magical tool. It’s about layering multiple approaches and methods until the picture becomes clear and the truth is revealed. Here is a sampling of the techniques we use:
Data Analytics and Pattern Recognition
Large datasets reveal behaviors people don’t expect anyone to notice: repeated transfers just under reporting thresholds, payments clustered around critical events, or unusual vendor activity.
Document Reconstruction
Pulling together shipping documents, invoices, emails, banking information, internal communications, and tracing transactions through the accounting processes often reveals inconsistencies that aren’t obvious in isolation. A two-line email can sometimes reveal what a hundred-page spreadsheet tries to obscure.
Interviews and Legal Tools
Speaking with employees, reviewing internal messages, or using subpoenas to obtain third-party records often provides the missing link between financial reality and illicit intent.
The investigative process requires systematic analysis and patience. Hidden transactions are built on complexity. Our job is to simplify that complexity until the economic reality is revealed.
What Businesses and Litigators Should Keep in Mind
If you’re involved in litigation—or operating a business where money flows through multiple hands—there are a few lessons worth remembering:
At the end of the day, tracing hidden transactions is less about fancy spreadsheets and more about clarity of what actually took place. When you uncover what a bad actor tried to hide, the rest of the case often begins to unfold and make sense.
AUTHOR BIO:
Charles “CJ” Pulcine, CPA, CFF is a Manager in Smolin’s Forensic and Valuation Services practice, specializing in forensic accounting, fraud investigations, and litigation support. He is a licensed Certified Public Accountant in New Jersey and holds the Certified in Financial Forensics (CFF) credential.
With more than seven years of experience in forensic accounting, financial audits, and fraud investigation, CJ works with businesses and legal counsel on financial fraud investigations, commercial litigation support, matrimonial litigation, business valuation analyses, and shareholder disputes. His work focuses on uncovering hidden transactions, tracing assets, and analyzing financial misconduct.
As a member of Smolin’s forensic team, CJ supports attorneys throughout the litigation lifecycle, including asset tracing, damages analysis, and preparation of financial evidence for mediation, depositions, and trial. He practices out of Smolin’s Red Bank, New Jersey office.
Effective February 1, the Spring Lake Heights team joined the Red Bank office, now located on the third floor at:
331 Newman Springs Road
Suite 130
Red Bank, NJ 07701
This relocation strengthens collaboration, expands resources, and ensures the firm continues to deliver the responsive, high quality service clients rely on. The new, modernized space offers increased capacity and improved efficiencies, enabling Smolin to better support our client needs across the region.
“As our firm grows, it is essential that our teams are positioned to collaborate effectively and have access to the tools and environment necessary to support our clients,” said Paul Fried, CPA, CEO. “This move reflects our long-term commitment to delivering exceptional service and enhancing the client experience.”
Smolin is excited to welcome clients to the new office. Clients with questions regarding the move are encouraged to contact their Smolin advisor directly.
Included in the One Big Beautiful Bill (OBBB) signed into law July 4, 2025 was the creation of a tax-advantaged savings account for children called “Trump accounts”. A Trump account is treated like an IRA with the following stipulations:
The IRS has announced that once the Treasury Department verifies that a Trump account was opened, the $1,000 of “seed money” for children born in 2025 will hit the accounts sometime after July 4, 2026. Michael and Susan Dell announced in December that they will personally be donating $6.25 billion to fund Trump accounts – $250 for 25 million children under age 11 in lower-income areas with median family income of $150,000 or less. Various large companies including Bank of America, Charles Schwab, Comcast, IBM, JPMorgan Chase and Wells Fargo have announced they will match the $1,000 contribution for the children of their employees.
Additional information can be found at www.trumpaccounts.gov.
When creating a will, most people focus on the big-ticket items — including who gets the house, the car and specific family heirlooms. But one element that’s often overlooked is the residuary clause. This clause determines what happens to the remainder of your estate — the assets not specifically mentioned in your will. Without one, even a carefully planned estate can end up in legal limbo, causing unnecessary stress, expense and conflict for your loved ones.
Defining a residuary clause
A residuary clause is the part of your will that distributes the “residue” of your estate. This residue includes any assets left after specific bequests, debts, taxes and administrative costs have been paid. It might include forgotten bank accounts, newly acquired property or investments you didn’t specifically name in your will.
For example, if your will leaves your car to your son and your jewelry to your daughter but doesn’t mention your savings account, the funds in that account would fall into your estate’s residue. The residuary clause ensures those funds are distributed according to your wishes — often to a named individual, group of heirs or charitable organization.
Omitting a residuary clause
Failing to include a residuary clause can create serious problems. When assets aren’t covered by specific instructions in a will, they’re considered “intestate property.” This means those assets will be distributed according to state intestacy laws rather than your personal wishes. In some cases, this could result in distant relatives inheriting part of your estate or assets going to individuals you never intended to benefit.
Without a residuary clause, your executor or family members may also need to seek court intervention to determine how to handle the leftover property. This adds time, legal costs and emotional strain to an already difficult process.
Moreover, the absence of a residuary clause can lead to family disputes. When the law, rather than your will, determines who gets what, heirs may disagree over how to interpret your intentions. A simple clause could prevent these misunderstandings and preserve family harmony.
Adding flexibility to your plan
A key advantage of a residuary clause is added flexibility. Life circumstances change — new assets are acquired, accounts are opened or closed, and property values fluctuate.
If your will doesn’t specifically list every asset (and most don’t), a residuary clause acts as a safety net to ensure nothing is left out. It can even account for unexpected windfalls or proceeds from insurance or lawsuits that arise after your passing.
Providing extra peace of mind
Including a residuary clause in your will is one of the simplest ways to make sure your entire estate is handled according to your wishes. It helps avoid gaps in your estate plan, minimizes legal complications and ensures your executor can distribute your assets smoothly. Contact Smolin Representative for additional details. Ask your estate planning attorney to add a residuary clause to your will.
Inventory is one of the most significant assets on a balance sheet for many businesses. If your business owns inventory, you have some flexibility in how it’s tracked and expensed under U.S. Generally Accepted Accounting Principles (GAAP). The method you use to report inventory can have a dramatic impact on your bottom line and tax obligations. In addition, it will affect your financial ratios. Let’s review the rules and explore your options.
Inventory varies depending on a business’s operations. Retailers may have merchandise available for sale. Meanwhile, manufacturers and contractors may have materials, work in progress and finished goods.
Under Accounting Standards Codification Topic 330, you must generally record inventory when it’s received or when control of the inventory transfers to your company. Then, it moves to cost of goods sold when the product ships and control of the inventory transfers to the customer.
While inventory is in your possession, you can apply different accounting methods that will affect its value on your company’s balance sheet. When inventory is sold, your reporting method also impacts the costs of goods sold reported on your income statement. Four common methods for reporting inventory under GAAP are:
1. First-in, first-out (FIFO). Under this method, the first items entered into inventory are the first ones presumed sold. In an inflationary environment, units purchased earlier are generally less expensive than items purchased later. As a result, applying the FIFO method will generally cause a company to report lower expenses for items sold. This method leaves higher-cost items on the balance sheet. In short, this method enhances pretax profits and balance sheet values. However, it can have adverse tax consequences (because you report higher taxable income).
2. Last-in, first-out method (LIFO). Here, the last items entered are the first presumed sold. In an inflationary environment, units purchased later are generally more expensive than items purchased earlier. As a result, applying the LIFO method will generally cause a company to report higher expenses for items sold. This process leaves lower-cost items on the balance sheet. In short, this method may defer tax obligations. However, its effects on pretax profits and balance sheet values may raise a red flag to lenders and investors.
Under the LIFO conformity rule, if you use this method for tax purposes, you must also use it for financial reporting. It’s also important to note that the tax benefits of using this method may diminish if the company reduces its inventory levels. When that happens, the company may start expensing older, less expensive cost layers.
3. Weighted-average cost. Some companies use this method to smooth cost fluctuations associated with LIFO and FIFO. It assigns a weighted-average cost to all units available for sale during a period. This produces a more consistent per-unit cost. It’s common not only for commodities but also for manufacturers, distributors and retailers that handle large volumes of similar or interchangeable products.
4. Specific identification. When a company’s inventory is one of a kind, such as artwork, luxury automobiles or custom homes, it may be appropriate to use the specific identification method. Here, each item is reported at historic cost, and that amount is generally carried on the books until the specific item is sold. However, a write-off may be required if an item’s market value falls below its carrying value. Once inventory has been written down, GAAP prohibits reversal of the adjustment.
Under GAAP, inventory is valued at the lower of 1) cost, or 2) net realizable value or market value, depending on the method you choose.
Each inventory reporting method has pros and cons. Factors to consider include the type of inventory you carry, cost volatility, and industry accounting conventions. You should also consider the sophistication of your bookkeeping personnel and software.
Also evaluate how each method will affect your financial ratios. Lenders and investors often monitor performance based on profitability, liquidity and asset management ratios. For instance, if you’re comparing LIFO to FIFO, the latter will boost your pretax profits and make your balance sheet appear stronger. However, you’ll lose out on the tax benefits, which could strain your cash flow. The weighted-average cost method might smooth out your profitability. Still, it might not be appropriate for the types of products you sell. The specific identification method may provide the most accurate insight into a company’s profitability. Nevertheless, it’s reserved primarily for easily identifiable inventory.
Whatever inventory accounting method you select must be applied consistently and disclosed in your financial statements. A change in method is treated as a change in accounting principle under GAAP, requiring justification, disclosure and, if material, retrospective application.
Choosing the optimal inventory accounting method affects more than bookkeeping — it influences tax obligations and cash flow. In addition, it affects stakeholders’ perception of your business. Contact your Smolin representative for help evaluating your options strategically and ensuring your methods are clearly disclosed.
