Death is an equal opportunity experience. When your appointed time arrives, will your personal and financial affairs be found in order or in disorder? How will your Life & Estate Plan be graded, once it has passed through the three basic stages of Estate Administration? These basic stages are Collection & Management; Payment of Creditors; and Asset Administration & Distribution.

Collection & Management
     The initial responsibility of your appointed fiduciaries will be to identify, safeguard and insure your assets. Unfortunately, if they cannot identify your assets, then it will be impossible to safeguard and insure your assets. Have you created and maintained an up-to-date inventory of your assets? At a minimum, your inventory should provide sufficiently detailed information about your assets so your fiduciaries can find them. 
     If you have a properly funded Revocable Living Trust along with a current inventory of all of your assets, then you will dramatically lighten the Collection & Management burden on your fiduciaries.
     Nevertheless, even if your Life & Estate Plan does not include a Revocable Living Trust, a current inventory will spare your fiduciaries considerable time, aggravation and money in fulfillment of their initial responsibility.

Pay Expenses
     With your assets collected and under management, your fiduciaries are ready to begin paying the expenses you left behind. These expenses include satisfaction of your just debts, your remaining tax liabilities, and your various post-mortem expenses. Time is of the essence in resolving these financial loose ends.
     Your fiduciaries will be held personally liable for failing to dot all of the i’s and cross all of the t’s when it comes to dealing with the creditors of your estate, to include the IRS. This potentially unending liability extends beyond third-party creditors to your own estate beneficiaries. For example, certain post-mortem planning techniques, such as various elections and disclaimers must be exercised prior to filing the federal estate tax return (due within nine months of your death). The failure to properly exercise such post-mortem techniques may result in adverse tax and non-tax consequences.

Asset Administration & Distribution
     Assuming your fiduciaries still have assets under management after paying your debts, taxes and expenses, then it is time for them to fulfill their final responsibility to administer and distribute your assets as stated in your Life & Estate Plan. This is the moment of truth: Will your assets be protected both for and from your loved ones…or will they be lost through their divorces, lawsuits, bankruptcies and squandering.
     Without proper Life & Estate Plans for this stage of Estate Administration, your fiduciaries may have no choice but to deliver your assets to parties you would otherwise intend to disinherit, rather than to your loved ones. Like trying to put toothpaste back in its tube, once you are gone the opportunity to change your administration and distribution plans is lost.
     Alternatively, consider taking steps now to help ensure a successful conclusion to your Life & Estate Plans. For example, remarriage provisions may help protect your assets for your surviving spouse and children. Long-term discretionary trust provisions may protect your assets both for and from your heirs, even for unborn generations in perpetuity. You worked a lifetime for your assets, but without proper planning your financial legacy can be taken or lost in the blink of an eye.
     Aside from your tangible financial legacy, have you considered leaving an intangible character legacy for your loved ones as part of your Life & Estate Plan. For example, you might write individually addressed last letters to remind your loved ones of your love and your confidence in them as they press on to their own successful conclusions.     Take time today to draft these last letters. Write the letters in your own hand. This is a lost art in this computer age of word processors and email. Then, in your Life & Estate Plan, instruct your fiduciaries to mail these last letters to your loved ones after your debts, taxes and expenses have been fully satisfied.
     By the way, the inventory of your financial assets is an excellent place to keep both these last letters and the instructions for their delivery.

     Trust funding  is the process of placing your assets under the ownership and control of your Revocable Living Trust. Only those assets that are titled in the name of your Trust (or which name your Trust as beneficiary where appropriate) will be controlled by the terms of your Trust in the event of your incapacity or death. 
     Otherwise your assets may be subject to probate, may lose valuable protection from estate taxes and may not pass to your beneficiaries as specified in your Life & Estate Plan.

There are three fundamental steps in the Trust Funding process:

1. Identify all of your assets by:

• Type: For example, is this asset a bond certificate, a certificate of deposit, or a publicly-traded stock certificate?

• Value: How much is it worth and is it encumbered by debt?

• Ownership: Do you own it individually or jointly with a spouse or others?

2. Transfer Ownership:  Once you have identified your assets, you can begin transferring ownership to your Trust by sending written notice to the various institutions involved. In that notice you identify the asset, the name of your Trust and then request the change of ownership or beneficiary designation. (Do not be surprised if they respond with a request for completion of their own form.)

3. Maintain Your Trust Funding:  As you acquire additional assets, be sure to title them with ownership by your Trust or use the appropriate beneficiary designation from the outset.

Here are some common assets and general funding instructions:

Real Estate

• Your Personal Residence: Even if there is a mortgage against your residence, Federal law (The Garn-St. Germain Depository Institutions Act of 1982) allows you to transfer your residence to your Living Trust when the loan is federally-backed.

• Other Real Estate: If you have debt against any other type of real estate, first contact the lender to obtain permission to transfer ownership to your Trust. The Federal law protecting transfer of your personal residence does not extend to your non-personal residence real estate. Failure to obtain prior approval could result in an acceleration of payments.

Cash Accounts

• Checking, Savings and Money Market Accounts: This typically is a simple task accomplished at the institution itself. Expect to sign new signature cards as Trustee.

Stocks and Bonds

• Privately-Held Securities: In most cases you will complete the Stock Power found on the reverse side of the certificate. Then deliver the certificate to the secretary of the corporation for reissue of a new certificate in the name of your Trust.

• Publicly-Held Securities* must be transferred through the transfer agent for the issuing entity or through your stockbroker.

• Mutual Funds* usually require only a letter of instruction.

• Brokerage Accounts* are simple to transfer through your stockbroker and are an excellent place to hold all of your stocks, bonds and mutual funds.

* Your signature likely will need to be “guaranteed” to accomplish this. Contact your stockbroker or bank regarding this service.

Beneficiary Designations

• Life Insurance: If you name your Trust as the beneficiary of all of your existing and future life insurance policies, then the proceeds will be administered and distributed according to the terms of your Trust. [Note: Because the death proceeds will be included in the value of your estate, consideration should be given to establishing an Irrevocable Trust as owner and beneficiary to remove the death proceeds from your estate subject to certain rules.]

• Qualified Retirement Plans: There are so many complex tax and non-tax consequences with any beneficiary option you may select that no decision should be made without appropriate legal advice and counsel.

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