What are Your Assets?

Estate Assets: Drawing the Lines

Though an estate plan is much more than planned disposition of assets, the flow of your assets is a central aspect of most plans. Understanding the nature and extent of your wealth is essential for any proper planning. Absent such understanding, your ability to plan your estate can legitimately be contested.

One way or another, when you die, the assets you've worked your entire life to accumulate will be redistributed. Most estate assets fall into a number of broad categories. This article examines some of the issues that each asset type raises in creating an estate plan.

Where to Look for Your Assets

5. Tangible Personal Property includes all your "stuff". If you are at home, look around at some of your things. At the very least, visualize some of your most important items. Have you accumulated a lot of stuff? Some of your most important possessions may be readily turned into cash. Others may be mostly sentimental in value. Perhaps the disposition of a single valuable item dominates your thoughts.

What they say is true: you can't take it with you. Still, without planning, some your favorite stuff may go to family and friends while other treasured items may end up in thrift shops. With planning, on the other hand, you can have a voice in your possessions' inevitable redistribution. You worked for it; you may have spent countless hours mall shopping or antiquing to find it; maybe you inherited it yourself. So why shouldn't you have some say in what happens to it? Give your wine cellar to your best friends, to be sipped on special occasions; divide your Lladro © collection among your grandchildren; in short, pass on your tastes and a piece of your personality by giving special items to those who will cherish them. This is the time to be as specific as you wish. Truly valuable objects, even those whose only value is sentimental, deserve special treatment. On the other hand, if "stuff" is not important to you, you can deal with it in a cursory fashion.

If you think that your beneficiaries may overlook the true value of your stuff, you may want to direct the involvement of estate sale specialists. If you have a particular collection of value, make sure that the trustee or beneficiaries have some understanding or at least know where to turn for knowledge. Even your old clothes may have "vintage" value on Ebay ©.

In our best moments most of us would agree that personal relationships are the true fruits of our lives. Yet our consumer-crazed society exerts its influence: we get too easily wrapped up in our acquisitions. The passionate aftermath of a loved one's death is enough to make almost anyone lose perspective. For this reason, dividing "stuff"-even seemingly inconsequential objects whose value is only sentimental-can cause the biggest knock-down drag-out fights in the settlement of an estate. A perfect resolution, while a goal, may not be possible. But a plan that divides your things reasonably and intelligibly can help your heirs avoid painful disputes. How do you divide a room full of furniture into equal shares? Obviously, you can't. Yet you can provide for a fair way to resolve disagreements if multiple beneficiaries have an equal claim to something that cannot be divided.

One way of dealing with your stuff is by giving gifts during your lifetime. Would you enjoy seeing your niece wearing your antique pendant while you're still alive? By giving gifts, you not only avoid fights at your wake, but you can see your heirlooms being enjoyed while you are still here.

Whether you want to give gifts now or you can't part with your stuff and want to hold onto it until you are gone, you can allow current and future beneficiaries to select items that they covet. Add a new dimension to Thanksgiving get-togethers at your house by letting family members choose some things that will remind them of you. Be aware, though, that doing this may have drawbacks, depending on the dynamics of your family: One daughter may want everything while another, who finds the whole exercise morbid, refuses to pick out anything. Be careful not to fan tensions by introducing a divisive element to already tenuous relationships any earlier than necessary.

With or without input from your beneficiaries, you may leave specific instructions with as much detail as possible, in writing, photos or videos that settle the question of who gets what and thereby eliminate uncertainty. Moderation is advisable here, as in all things: you can make yourself crazy if you try to account for every item.

Legacy Enhancer: He who gave you a gift during your lifetime gets first dibs on it when you're gone. Put that in writing.

I am not a big fan of marking your things with stickers to divide them. For some families, though, this method works out fine. If you decide to "stickerize" your stuff be sure to use stickers large enough to contain an item description in your own handwriting. Don't just put a sticker on something with a name. Price-tag switching is a crime!

After detailing particular items with as much specificity as desired, divide your personal property "residuary"-what's left after specific bequests are made-among classes of people. You can define groupings of stuff according to various categories and groupings of people entitled to one or more items: "my niece receives my car, my surviving children divide everything else in substantially equal shares," or "my tools to my daughters, my jewelry to my sons." Since multiple beneficiaries may want the same indivisible item, you must provide for a way to resolve disagreements. This is also the place to specify what happens if a person listed as getting something doesn't survive you. Finally, you should address what happens if something specifically mentioned is not part of your estate-usually because you already gave it to its recipient, you lost it, or it was stolen. If this is a mystery to the inheritor, then it becomes a question of fact, which can lead to estrangements or court battles.

A number of conflict resolution techniques can ease the process of dividing personal property. You could direct, for instance, that the kids draw in order by age, and then continue to draw by reversing the order each time. Others utilize games of chance, rolling dice, drawing cards or playing "rock, paper, scissors". For some families, this makes as much sense as any other way of resolving who gets what stuff. If a really complex, intense or contentious issue arises regarding your personal property, then the executor/trustee in charge must rise to the occasion. In determining a fair system to break a deadlock, consider more formal means of dispute resolution. You might leave decisions to the trustee or a disinterested third party, or provide for a committee (of siblings, for instance) to decide by majority. For more intractable problems, you can provide for outside mediation.

On the other hand, if your stuff is fabulous but hard to divide, or your beneficiaries don't get along particularly well, you can direct the involvement of estate sale professionals to sell your belongings and distribute the proceeds.

One of the first legal concepts kids learn is that "possession is 9/10ths of the law." It worked for roller skates in grade school, and your kids may expect it to work for your possessions as well. Whoever gets to the house or the safe deposit box first to take whatever he can may indeed end up the winner. If the thought of your children racing to get to your stuff before you are even buried disturbs you, devise a plan to keep things fair so that such a nightmare scenario can be prevented.

Leona Helmsley, hotelier and reputed "Queen of Mean", died in 2007. She directed that she be interred wearing her wedding band, "never to be removed from her finger". I regard that as a beautiful sign of devotion to her late husband Harry. She did not, however, show much sentimentality in directing her executor to sell all of the rest of her "furniture, furnishings, books, paintings and other objects of art, wearing apparel, jewelry, automobiles, and all other tangible personal property..."

If you are a trustee or executor involved in the activity of distributing tangible personal property, you should do your best to keep a record of who takes what and how decisions were made. Your notes may come in handy if disputes arise later.

If you are inheriting stuff, go through all of it carefully. Take the drawers out of grandma's dresser and look around; you might find the $1,000 grandma taped to the back of her drawer and forgot about. People hide things so well that even they can't find them later on. Rooting around for buried treasure in the back yard with a metal detector might not be a bad idea either.

Keeping It Clean: If there's a side of you that you would prefer your family not to know about, choose someone to "sanitize" your stuff after you're gone-delete computer files or discreetly get rid of that sex toy at the back of the underwear drawer.

I'll close this section with stories from two of my clients, to give you an idea of what a difference planning can make in the division of tangible personal property.

Franny's Broken Promise

My mother inherited a diamond engagement ring from her own grandmother a number of years ago. A few years after Dad died, Mom got remarried to Wilbur. Though Mom had told me that upon her death the ring would be given to my daughter Claire, and everyone in the family knew about "the promise", when Mom died she only left behind a "simple" will leaving everything to Wilbur, with me and my other sister Iris, as secondary beneficiaries. Though Wilbur acknowledged "the promise", he was in no hurry to give me the ring, and when he died five years later, Alice (my evil stepsister) inherited the ring from him. Alice would not even entertain the notion that I had any rights to Wilbur's personal assets, including the ring that legally belonged to him when he died. When Alice died, I heard that she left the ring to her son, who in turn gave it to his wife, who gave it to her own daughter from a previous marriage. Before long, as if I cared, Alice's son and his second wife divorced. What happened to the ring after all this? All I know is that "the promise" will never be fulfilled.

The lesson: If you don't bother to plan correctly-and explicitly-anything can happen.

Jan: Following the Game Plan

My parents wanted to make sure that all of their estate was divided equally amongst their 7 children. This was hardest with the personal assets. Several years before their death they sat down with the 4 girls and we divided Mom's jewelry according to our preferences. Mom then gifted the jewelry, worth about $30,000 total, to us. The boys were gifted an equivalent amount of cash at that time. When our parents died, the remainder of their personal assets were left to be divided among my siblings and me "as fairly as possible".

Our first discovery was that there was no way to make all 7 siblings happy. There is an almost 20-year span between the oldest and the youngest; being at different places in life, we had diverse ideas about how things should proceed. My sister and I (the co-trustees) were happy to entertain any and all suggestions, of which there were many. After much deliberation we finally decided on a formula.

We already had everything appraised for tax purposes and used the appraiser's values. For everything that the appraiser listed as having no appreciable value, we hired someone who did estate and garage sales to assign prices. In every room of the house we put a box with a slit in the top. We asked our parents' best friends to join us for the day and they graciously accepted. We set a date when all the sibs could be there.

When everyone arrived at our parents' home we gave them each a package of labels with their name on them. We agreed not to discuss with each other the things we were interested in. This came about because of family dynamics: we didn't want one person telling everyone else what they wanted and having others back off because of it. Once everyone was there, we sat at the table and explained our plan. It consisted of 3 rounds. The first round was only for the 7 of us - no spouses. The second round was for spouses also and the third for grandchildren. We felt this method was necessary since not all of us had individual families. Otherwise, each round worked the same. We asked everyone to take one hour and just walk around the house. If you were in a room where there was something you were interested in, you were to write down the item on one of your labels and put it in the box. At the end of the hour we collected the boxes and we all met around the kitchen table. Our parents' friends opened the boxes and did the tallies. If only one person wanted an item, he/she could purchase it for the appraised value. If more than one person wanted it, we pulled names from a hat. The winner of the draw could then purchase the item. Once all boxes were open and everything tallied, we started round two and then round three. By the end of round 3 we were able to tally everything.

Once that was done we all started helping each other pack things up. We each paid our total and put all the money in the pot. Once all the money was there the pot was divided by seven. We all ended up with an equal value.

Some unclaimed items were offered to friends, and others were donated to Salvation Army.

The process worked well overall; still, one of the difficult things with this was that some of us never had good luck with the draw. Nevertheless, our parents would have been proud-they taught us resourcefulness and respect for each other.

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6. Retirement plans including Individual Retirement Accounts (IRAs) are the fastest growing component of Americans' savings. By the end of 2005, according to the Investment Company Institute, IRA assets totaled 3.7 trillion dollars. It's a staggering sum and so are the mazes of tax challenges. (Roth IRAs are completely different and not included in this article.)

Your IRA is the same as cash in some ways, but the twists and turns of naming the right beneficiary can be mind-bogglingly complex. You probably already know that the biggest advantage of an IRA over other types of savings is the deferral of income tax. During the accumulation phase, when you're young, you contribute pre-tax dollars. Then during the deferral phase, your IRA investments grow without any income-tax earnings drag. When you are old, you take out your savings and pay tax, possibly at a lower rate. If you don't need the money, you try to hold off (defer) IRA withdrawals for as long as possible.

The RMD: On the April Fool's Day following your hitting age 70 ½, you are forced to start withdrawing and paying the taxes. A Required Minimum Distribution (RMD) table dictates the least amount you can withdraw yearly. If the RMD is not taken, IRS hits you with a big penalty, so even if you don't need the RMD you take it and leave the rest.

If there's anything left in your IRA when you die, your beneficiaries may be able to defer taxes too. Depending on how your beneficiary designation with the financial institution reads, the inheritor(s) can be more or less able to take it all out at once and pay the tax or defer the tax for a long time. The beneficiary designation is crucial, but it's often handled in the least-considered way. The trick is balancing your gift of the biggest IRA with the smallest RMD vs. control over both beneficiaries and possible contingent beneficiaries.

Unless your inheriting beneficiary is a spouse who is under age 70 ½, his RMD is based upon his age (assuming the beneficiary is younger than you-if the beneficiary is older, then your age is used to make the RMD calculation). If he doesn't withdraw the RMD by the December 31 after you die, then all money has to be taken out within 5 years.

In general, longer actuarial lifespan = smaller RMD = better deferral ability. At the same time, consider that only one side of the ledger. The other side is the beneficiary's right to blow the whole thing at once and pay a huge tax.

Beneficiary Options - Competing Considerations:

A. If Married, Rollover = Outright Gift to Spouse: In most cases, where you and your husband have a commonality of interests (same children, etc.) it's best to name him as primary beneficiary, because only he can "rollover" your IRA when you die. A rollover allows him to treat your IRA as if he was the original owner. He doesn't have to take an RMD unless he is over 70 ½. He can name his own new beneficiaries. He can spend it all and pay the tax.

A rollover strategy doesn't work well if:

• You and your spouse don't share a commonality of interest. You have a blended family or your immediate family ties differ. You can leave him a lifetime interest paying the yearly RMD after you die, but then when he dies, whatever is left goes to your beneficiaries, not his. You need a trust to do this.
• Estate taxes are a concern and you need to use the IRA assets to shelter your exempt amount (applicable exclusion). Through a trust, you can ensure that your spouse gets the RMD and additional IRA money as needed at a trustee's discretion. This path is sometimes coupled with a disclaimer strategy where your husband is named primarily and the shelter trust contingently. Then, if he survives, he can disclaim, and not take the rollover option. Any amount disclaimed would go to the trust and fill up a portion of your exempt amount. His decision to disclaim or not would be based upon an overall future tax analysis. If you go this route, then you are depending upon him making the right moves within 9 months of your death. When using this strategy, your trust should use a fractional funding formula rather than a pecuniary one.
• Your husband doesn't need the IRA assets and is near 70 ½, then a younger person-child, grandchild, nephew, friend, etc.-makes a better choice purely from a tax standpoint. Your 28 year old nephew or daughter has to take an RMD based upon his/her age by the end of the year after you die. A 50 year old husband doesn't have to take anything from an outright IRA gift that he rolls over, but at 70 ½, just like anyone else, he does.

B. Charities: IRA assets make ideal charitable gifts, because no income tax will ever be paid on the assets once the gift is made. IRAs left to charity are also deductible for estate tax purposes. Big tax warning: if you leave IRA money to a charity, it should be done from its own separate IRA account. Charitable and individual beneficiaries should not be mixed in the same account (or trust), primarily or contingently, unless you don't care about your individual beneficiaries' higher RMD.

C. Non-Spouse Individual Beneficiaries: If you are under 70 ½ when you die, then younger individual beneficiaries use their own low RMD. Either way, the simplest tax advantaged route is to name young individuals as outright beneficiaries, but then they can get unlimited immediate access to all of it within weeks of your death. Consider your 4 year old nephew. Control may be subject to costly annual oversight by the probate court until he reaches majority (usually 18 or 21, depending on your state). Then upon reaching majority he gets full control, subject only to the RMD. He then ignores the RMD and spends it all, paying big taxes.

D. Non-Spouse Individual Contingent Beneficiaries: Even if your primary beneficiary is appropriate, what if that person doesn't survive you? The answer depends again on the beneficiary designation on file with the financial institution. Usually, the dead beneficiary's share either lapses in favor of the remaining beneficiaries (per capita) or it is further distributed to that person's descendants (per stirpes), who may be immature. If you name no contingent beneficiary, then any undistributed amount will likely pass to your probate estate and be distributed according to your will if you have a will, or according to your state's intestacy laws if you don't have one. IRA assets passing through your probate estate will not receive stretch treatment; taxes will be paid on an accelerated basis.

Contingency planning may require you to step outside your usual perspective and weigh the possibility, though not necessarily the probability, of money going to the wrong person at the wrong time. This could also happen if the beneficiary survives you, takes control of the IRA, dies, and then the money ends up in the wrong hands. So many possibilities, and while you can't plan for all of them, you can anticipate some.

E. Trust as Beneficiary: You can maintain more postmortem control over the direction IRA assets take by naming a trust as beneficiary. But naming a trust may result in the harsh consequence of limiting income tax deferral to just 5 years, unless the trust is of the "see-through" variety (discussed below). Still, your circumstances may make control (designating a trust as beneficiary) trump tax deferral (designating an individual as beneficiary). Trusts can be used to balance your control and tax deferral concerns.

"See-Through" (a.k.a "qualifying") Trusts are trusts that allow the IRS metaphorically to "see through" the document to a designated individual beneficiary in order to calculate the RMD, based on the age of the oldest beneficiary, just as if just that beneficiary had received the IRA. To qualify for "see-through" treatment, the RMD of the IRA must be distributed annually to all of the beneficiaries outright. If the trustee has discretion to withhold the RMD, then the trust is an Accumulation Trust and tax treatment will be on an accelerated basis rather than one that allows the IRA to be stretched. Also, undistributed RMD is taxed at the top rate of 35% once $10,450 has been accumulated in the trust.

There are different types of See-Through Trusts: Trusteed IRAs and Conduit Trusts:

• Trusteed IRAs (a.k.a. Individual Retirement Trusts): An increasing number of financial institutions offer dual services, acting as both a passive IRA custodian and a trustee. As trustee, the institution controls distributions from the IRA, doling out the assets to the inheriting beneficiary according to the agreement that you and the financial institution have reached.
• Safe tax deferral and control: An advantage is that the trust company must follow a strict format authorized by IRS. You can rest assured that the Trusteed IRA assets will enjoy excellent stretch treatment along with the control aspect you specify. Since your financial institution will be precisely following IRS rules, the likelihood that you will need to continually amend your trust or that IRS will challenge the stretch of the individual beneficiary is minimized.
• Usually only for large IRAs: In order for a financial institution to agree to become a trustee under this approach, the size of your IRA account must be fairly large, usually at least $1/2 million or more.
• Limited control: The well-known and respected financial institutions offering this service may resist your customized beneficiary requests if they vary too much from their usually format. But in today's competitive financial services industry, the institution may be willing to accommodate your wishes.
• Conduit Trusts: Conduit trusts can either stand alone or be part of your revocable trust; they do not require an institutional trustee. The future trustee of your trust will control and invest your IRA assets in accordance with your written directions.
• Less certain tax deferral and more chance of unintended results: If drafted correctly, conduit trusts provide stretch capabilities, but compared to a Trusteed IRA you may have to keep a closer eye on it. As tax laws change over time, so may you need to amend your trust to ensure the smallest RMD to your beneficiaries.
• Any size IRA: A Conduit Trust can be created regardless of the size of your IRA.
• Increased control: You can direct disbursements that precisely fit your wishes. A pitfall is that seemingly simple controls over the ability of a trustee to withhold paying the RMD may inadvertently jeopardize the conduit, turning the trust into an Accumulation Trust and subjecting it to earlier income tax.
• Easy for the IRA custodian: Naming a single Conduit Trust as beneficiary is easy for financial services companies to accommodate: they simply transfer the IRA control to the trustee of the trust and their post-mortem work is finished. They don't have to read the trust or give any opinions as to its validity.

You can give the trustee of either a Conduit Trust or a Trusteed IRA discretion to make additional distributions exceeding the RMD. Examples: If a young beneficiary has little or no income, the trustee may decide that it's a wise idea to "fill up" the beneficiary's low tax bracket.

Funds can be distributed to meet the beneficiary's health, education, or support needs.

Some quirky pitfalls that neither a Trusteed IRA nor a Conduit Trust will allow:

• Individual and charitable IRA gifts to be made from the same trust, primarily or contingently. If there is the potential for that to happen, then IRS may ditch the stretch and accelerate the RMD to a 5 year period following your death. Any mixed-up portion going to charity might still be tax advantaged, but the individual beneficiaries would lose their ability to take a full stretch using the age of the eldest one.
• Specific money bequests to be made from IRA money. Another potential stretch-wrecker;
• Payment of debts from the IRA pot. Stretch-wrecker;
• If there's a chance that money can go to someone older than the eldest primary beneficiary, then the RMD can be tied to the age of an older contingent beneficiary. This is a particular problem if there are age or other restrictions on a primary beneficiary.

Examples of pitfalls in action:

• A trust names your 2 children (19 and 22) as primary beneficiaries. However, they don't get the money outright unless they have attained age 25 (authority over 1/2) and 30 (authority over the balance). It goes on to say that if you and all of your descendants are dead before there has been a complete payout of assets, everything goes to your parents or their descendants. That is a reasonably common pattern of disposition. There is a possibility that, even though your children survive you, the RMD/stretch will be determined by your father's age as the oldest possible taker instead of your older child. The reason I say that it's a "relatively low" risk is because "mere potential successor" beneficiaries are not supposed to be considered by IRS when determining the RMD calculation of a trust. The way around that is to drop the age restriction and not specifically mention the contingent beneficiaries. But then your planning goals become fuzzier and less sharply articulated. It puts your advisor who is striving to precisely capture your wishes between a rock and a hard place.
• Your trust is the same as above, but it goes on to say that if everyone is gone (can you say "post-apocalyptic"?) - then whatever is left goes to a charity. Though the odds are distant against the charity getting anything under this example, some professionals would still advise that this language can blow your entire tax strategy. Since there is no defined body of law to give clear direction, the safest route is to not even mention a contingent charity.
• The trust says your children can take out money at their sole discretion. A general power of appointment is the same as the right of withdrawal. The persons who hold trust assets with a general power of appointment own it in all respects. They can give it all away to charity. But, weirdly, if the beneficiaries' ability to give money to charity is mentioned, you risk their favorable RMD.

It's unfortunate that legal energy is devoted to such arcane contingency planning, but that's a function of our complicated tax laws. These wrinkles are open to interpretation, leading to a lot of cautiousness in drafting. If some seemingly small contingency destroys your tax strategy it would be a bad day, so talk to your expert.

A last minute patch:

Even if your trust has some pitfall that ruins your beneficiaries' most favorable RMD, there is some wriggle room. Until the September 30 following your death, your trustee and beneficiaries can work out details that fix up the trust's see-through provisions and allow for lower RMDs. Charities can be paid and specific bequests made, leaving only the designated individual beneficiaries that will qualify for see-through trust treatment. Like disclaimers, this is a form of post-mortem planning. Even the post-mortem patch has a pitfall: to be effective it may require all of the parties, including the trustee, beneficiaries and possibly contingent beneficiaries, to come to a written agreement by the deadline.

F. Hybrid Beneficiary Designation

Some financial services companies allow you to name individuals subject to extraneous conduit trust provisions. For example: To my children (names, etc.) in equal shares, provided that if a child shall not survive me, his/her share shall be distributed to his/her then living descendants, collectively and per stirpes, and if any descendant of mine who shall be a beneficiary is younger than the age 25, such share shall be subject to Article 4 of the Eric Matlin Retirement Benefits Trust dated July 4, 1976, as amended. This can be ideal if you feel comfortable making an outright gift of your IRA to your adult children, but would prefer certain protections if any of your IRA ultimately fell to a grandchild. As with Trusteed IRAs, though financial institutions may be reluctant to embrace these customized designations, they are becoming increasingly willing to accommodate such requests due to competition in the marketplace. They may simply require you to sign a waiver, dumping any future potential problems into someone else's lap.

The advantage of the hybrid approach is that it allows for RMD calculation based upon each person's age, a big edge if there is a wide discrepancy between the ages of the youngest and oldest beneficiary.

Qualified Retirement Plans

While SEPs, 401Ks, 403Bs, and other qualified retirement plan assets accumulated while working in someone's employ share many financial and estate planning attributes with IRAs, they are not identical. When leaving employment, depending on the plan agreement, you may be able to use a participant rollover to create a regular IRA that you self-direct. If so, you can utilize all of the IRA strategies discussed above. Your employer or plan provider should be able to explain the conditions under which you can roll over your plan now or in the event of retirement or job change. Usually, if a participant rollover is permitted, so is a spousal rollover upon your death.

Beginning in 2006, the IRS began allowing qualified retirement plans to offer "stretches" to non-spousal beneficiaries in a manner identical to IRAs without first having to roll the assets into an IRA. But employers' plans vary significantly (compared to IRAs, which are basically all the same). The plan administrator can tell you what options are available in your employer's plan. Even today, many qualified retirement plans require non-spouse beneficiaries to accelerate RMDs to a five-or even a one-year payout.

Final thoughts about IRA beneficiary designations:

It's a tricky financial world out there but proper estate planning can bring considerable rewards to your retirement plans. Beneficiary designations are often as important to the big picture of your IRA as its investment mix. Careful planning through the use of trusts may be the best solution, but because the rules governing this approach are relatively new and untested, you can expect more change on the horizon. In the end, you have to weigh the competing factors of optimal stretch vs. optimal control and, if all the variables are not clear, possibly take a gamble.

Now is a good time to review the beneficiary designation on file with your IRA custodian or qualified plan administrator. Keep the confirmation with your other important papers. Are you reasonably certain that your IRA assets will flow to your loved ones as you truly intend them to?

Some Advice on Your Assets

Now that you have a handle on your assets, let me offer this advice:

Love your beneficiaries, not your assets. Consider how your assets can best help the people and causes you care about. You can pass on an investment philosophy, with spectacular detail if you wish, but just because you have had historic success investing in the market doesn't mean you want to tie the hands of any future trustee to retain particular securities or keep a real estate portfolio intact. Your investing methods may have brought you great success in the past, and it's all right to articulate them in writing, but always allow for flexibility so that a future trustee is not forced into investments that no longer serve the best interests of your beneficiaries.