Accounting

Estate planning for the Native Land Back Movement

Published

5 months ago

December 5, 2024

Philanthropically-inclined clients’ interest in the Land Back Movement is opening new realms of estate planning for financial advisors and tax professionals.

The Land Back Movement revolves around the mission of returning territorial assets seized from indigenous nations so that Native Americans reclaim ownership and stewardship of them. It is already playing out in various forms of land-transfer efforts in states such as California, Minnesota, Oklahoma, Alaska and Maine.

Individual estates’ bequests of land pose complicated planning questions begging the need for more collaboration among advisors, tax pros, attorneys and other professionals, experts said.

Land Back “should be on our radar” as, “at some level, a subset of charitable giving,” said Alma Soongi Beck, counsel with Lathrop GPM‘s Private Client Services unit focusing on estate planning, trust and probate law. Although financial professionals of many types are familiar with the concept of a real estate transaction, leaving the assets to a beneficiary in a position to manage them entails an array of historical and legal complexities, Beck said.

“Clients will just raise it. We talk about where you want to leave your stuff. I’ve had clients say they want to give their house back to the local indigenous tribe,” she said in an interview. “There has been a huge, almost exponential, awareness-raising in the last five years, and what I expect in the next five years is, it’s going to keep growing.”

Discussions of returning land to Native people often come up in environmental justice and sustainability circles. But that rhetoric is “sometimes utopian” and “often just jumps right over the legal issues,” according to Jo Carrillo, professor of law and the faculty director of the Indigenous Law Center at University of California College of the Law, San Francisco (formerly UC Hastings). Financial planners and others assisting landowners should keep in mind that the transfers require thinking about a donor-advised fund or another means of providing a further layer of resources to support the beneficiaries’ management of the land, she said.

“What I would like them to know is, if land is transferred, there should also be money transferred to maintain that land,” Carrillo said. “Land requires money to support owning it, and that’s a very important part of the gift.”

Furthermore, advisors and other professionals facilitating the transaction must avoid “creating unnecessary legal battles” with the discretion that they give to any trustee to select tribal nations as the beneficiary and conduct careful research as to which ones previously lived on the land and have the capacity to supervise it, Beck said. The federal government formally recognizes 574 tribes, but every state has as many as several hundreds of other nations, bands, pueblos or villages. A Canadian website, Native-Land.ca, can aid in the search, but any given address or area will list up to a dozen or more tribes who once populated the land.

“The ‘why’ of Land Back is not hard for clients to wrap their minds around,” Beck said. “The harder question — even for those of us who have done some Land Back work — is the ‘who’ and the ‘how.'”

That speaks to the necessity for fiduciary planners and trustees to “know better what you’re doing than just being generous” and for donors “to get comfortable with the ‘how’ question,” Carrillo said. Those inherent dilemmas won’t solve themselves.

“We’re at the start of Land Back. In 10, 15 years, we’ll be at the litigation phase,” Carrillo said. “We have a very small group of experts. It’s almost like working in the high-end art market where you have a very small group of agents, galleries and potential purchasers simply because of the price point.”

In that regard, Carrillo and Beck are seeking more connections in the wealth management and tax professional fields to move the conversations forward, they said. Beck participates in a study group of practitioners who meet every one to three months to discuss the most pressing estate-planning topics surrounding the Land Back Movement.

“Definitely talk about it with clients and raise it, but go slowly enough that you’re not creating more problems than you’re trying to solve,” she said. “What we can figure out in community will benefit the work that everyone does. Like Jo says, we’re in the early stages. We want to get ahead of the issues and not have to clean it up afterwards.”

Accounting

IAASB tweaks standards on working with outside experts

Published

22 hours ago

April 25, 2025

Business Finance News

The International Auditing and Assurance Standards Board is proposing to tailor some of its standards to align with recent additions to the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants when it comes to using the work of an external expert.

The proposed narrow-scope amendments involve minor changes to several IAASB standards:

ISA 620, Using the Work of an Auditor’s Expert;
ISRE 2400 (Revised), Engagements to Review Historical Financial Statements;
ISAE 3000 (Revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information;
ISRS 4400 (Revised), Agreed-upon Procedures Engagements.

The IAASB is asking for comments via a digital response template that can be found on the IAASB website by July 24, 2025.

In December 2023, the IESBA approved an exposure draft for proposed revisions to the IESBA’s Code of Ethics related to using the work of an external expert. The proposals included three new sections to the Code of Ethics, including provisions for professional accountants in public practice; professional accountants in business and sustainability assurance practitioners. The IESBA approved the provisions on using the work of an external expert at its December 2024 meeting, establishing an ethical framework to guide accountants and sustainability assurance practitioners in evaluating whether an external expert has the necessary competence, capabilities and objectivity to use their work, as well as provisions on applying the Ethics Code’s conceptual framework when using the work of an outside expert.

Accounting

Tariffs will hit low-income Americans harder than richest, report says

Published

22 hours ago

April 25, 2025

Business Finance News

President Donald Trump’s tariffs would effectively cause a tax increase for low-income families that is more than three times higher than what wealthier Americans would pay, according to an analysis from the Institute on Taxation and Economic Policy.

The report from the progressive think tank outlined the outcomes for Americans of all backgrounds if the tariffs currently in effect remain in place next year. Those making $28,600 or less would have to spend 6.2% more of their income due to higher prices, while the richest Americans with income of at least $914,900 are expected to spend 1.7% more. Middle-income families making between $55,100 and $94,100 would pay 5% more of their earnings.

Trump has imposed the steepest U.S. duties in more than a century, including a 145% tariff on many products from China, a 25% rate on most imports from Canada and Mexico, duties on some sectors such as steel and aluminum and a baseline 10% tariff on the rest of the country’s trading partners. He suspended higher, customized tariffs on most countries for 90 days.

Economists have warned that costs from tariff increases would ultimately be passed on to U.S. consumers. And while prices will rise for everyone, lower-income families are expected to lose a larger portion of their budgets because they tend to spend more of their earnings on goods, including food and other necessities, compared to wealthier individuals.

Food prices could rise by 2.6% in the short run due to tariffs, according to an estimate from the Yale Budget Lab. Among all goods impacted, consumers are expected to face the steepest price hikes for clothing at 64%, the report showed.

The Yale Budget Lab projected that the tariffs would result in a loss of $4,700 a year on average for American households.

Accounting

At Schellman, AI reshapes a firm’s staffing needs

Published

23 hours ago

April 25, 2025

Business Finance News

Artificial intelligence is just getting started in the accounting world, but it is already helping firms like technology specialist Schellman do more things with fewer people, allowing the firm to scale back hiring and reduce headcount in certain areas through natural attrition.

Schellman CEO Avani Desai said there have definitely been some shifts in headcount at the Top 100 Firm, though she stressed it was nothing dramatic, as it mostly reflects natural attrition combined with being more selective with hiring. She said the firm has already made an internal decision to not reduce headcount in force, as that just indicates they didn’t hire properly the first time.

“It hasn’t been about reducing roles but evolving how we do work, so there wasn’t one specific date where we ‘started’ the reduction. It’s been more case by case. We’ve held back on refilling certain roles when we saw opportunities to streamline, especially with the use of new technologies like AI,” she said.

One area where the firm has found such opportunities has been in the testing of certain cybersecurity controls, particularly within the SOC framework. The firm examined all the controls it tests on the service side and asked which ones require human judgment or deep expertise. The answer was a lot of them. But for the ones that don’t, AI algorithms have been able to significantly lighten the load.

“[If] we don’t refill a role, it’s because the need actually has changed, or the process has improved so significantly [that] the workload is lighter or shared across the smarter system. So that’s what’s happening,” said Desai.

Outside of client services like SOC control testing and reporting, the firm has found efficiencies in administrative functions as well as certain internal operational processes. On the latter point, Desai noted that Schellman’s engineers, including the chief information officer, have been using AI to help develop code, which means they’re not relying as much on outside expertise on the internal service delivery side of things. There are still people in the development process, but their roles are changing: They’re writing less code, and doing more reviewing of code before it gets pushed into production, saving time and creating efficiencies.

“The best way for me to say this is, to us, this has been intentional. We paused hiring in a few areas where we saw overlaps, where technology was really working,” said Desai.

However, even in an age awash with AI, Schellman acknowledges there are certain jobs that need a human, at least for now. For example, the firm does assessments for the FedRAMP program, which is needed for cloud service providers to contract with certain government agencies. These assessments, even in the most stable of times, can be long and complex engagements, to say nothing of the less predictable nature of the current government. As such, it does not make as much sense to reduce human staff in this area.

“The way it is right now for us to do FedRAMP engagements, it’s a very manual process. There’s a lot of back and forth between us and a third party, the government, and we don’t see a lot of overall application or technology help… We’re in the federal space and you can imagine, [with] what’s going on right now, there’s a big changing market condition for clients and their pricing pressure,” said Desai.

As Schellman reduces staff levels in some places, it is increasing them in others. Desai said the firm is actively hiring in certain areas. In particular, it’s adding staff in technical cybersecurity (e.g., penetration testers), the aforementioned FedRAMP engagements, AI assessment (in line with recently becoming an ISO 42001 certification body) and in some client-facing roles like marketing and sales.

“So, to me, this isn’t about doing more with less … It’s about doing more of the right things with the right people,” said Desai.

While these moves have resulted in savings, she said that was never really the point, so whatever the firm has saved from staffing efficiencies it has reinvested in its tech stack to build its service line further. When asked for an example, she said the firm would like to focus more on penetration testing by building a SaaS tool for it. While Schellman has a proof of concept developed, she noted it would take a lot of money and time to deploy a full solution — both of which the firm now has more of because of its efficiency moves.

“What is the ‘why’ behind these decisions? The ‘why’ for us isn’t what I think you traditionally see, which is ‘We need to get profitability high. We need to have less people do more things.’ That’s not what it is like,” said Desai. “I want to be able to focus on quality. And the only way I think I can focus on quality is if my people are not focusing on things that don’t matter … I feel like I’m in a much better place because the smart people that I’ve hired are working on the riskiest and most complicated things.”