One of the initial tasks of my engagements as a professional fiduciary is to "marshal the assets" of my clients. That means finding all the bank accounts, insurance policies, investments, real estate, credit cards, etc. that are held by my clients. Some of those assets may be held in a trust. Some may be held in a deceased spouse's name. Some provide statements, some do not. It can take months, even years, to find everything. And even then, there's some lingering doubt that we've found everything. It's a kind of forensic accounting scavenger hunt (the most boring kind of scavenger hunt).
Some of these accounts are so small that the cost of finding them, contacting the financial institution, generating the required documentation and consolidating the funds can outweigh the value of the asset. But they legally have to be hunted down, consolidated and treated as part of the trust's assets in any case.
One of the process improvements I've implemented in the last few years is to work with my older clients to "tidy up" their financial lives. This not only makes things easier in the short run, in terms of documentation for taxes and keeping track of of all the accounts, but it makes it much easier when it is time to execute the terms of the trust. It lowers costs for everyone involved and reduces the chances of errors and omissions.
What does "tidying up" mean in practice? It might be helpful to go through the list below:
- Create a list of all financial accounts and assets.
- Add any pertinent information:
- Contact information for the institution
- Account numbers
- Name of any person that you worked with at the institution
- Rough estimate of value
- Username and password (this should be kept separate from the information above)
- Identify assets and accounts that are not providing value as a separate asset. Some of these may be left over from a previous employment or from an investment that made sense at the time and that you simply haven't had the time to unwind.
- Consolidate these assets into the most appropriate accounts (take into account the tax implications of selling appreciated assets). The goal is to reduce the overall number of accounts and assets.