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Distribution of Assets Plan
Allocates entity assets among designated beneficiaries or stakeholders upon dissolution, restructuring, or other triggering events, with jurisdiction-compliant execution formalities.
Prerequisites
- Entity identification — legal name, jurisdiction of formation, EIN
- Triggering event — dissolution, restructuring, death/incapacity of principal, merger
- Asset inventory sources — balance sheets, deeds, account statements, appraisals
- Beneficiary information — legal names, relationships, contact info, ownership percentages
- Governing documents — articles of incorporation, bylaws, operating agreement, shareholder agreement
- Jurisdiction — state of formation and any states where assets are located
Output Structure
1. Preamble
| Element | Content |
|---|---|
| Entity name & type | Full legal name, state, entity type |
| Effective date | Date of plan execution or triggering event |
| Triggering circumstances | Dissolution vote, court order, death, restructuring resolution |
| Legal authority | Governing statute (e.g., state Business Corporation Act, LLC Act) [VERIFY jurisdiction] |
| Plan purpose | One-sentence statement of intent |
2. Asset Inventory
For each asset, capture:
| Field | Detail |
|---|---|
| Asset ID | Sequential reference number |
| Category | Real property / Financial account / Business interest / IP / Equipment / Other |
| Description | Legal description, institution + last-4, registration # as applicable |
| Current FMV | Appraised or book value; valuation date |
| Encumbrances | Liens, mortgages, pledges, transfer restrictions |
| Disposition method | Liquidate / Transfer in kind / Retain for wind-down |
Categories to address:
- Real property (legal descriptions and recording references)
- Bank and investment accounts
- Accounts receivable and notes receivable
- Business interests / subsidiary equity
- Intellectual property (patents, trademarks, copyrights, trade secrets)
- Contracts and licenses (flag assignable vs. non-assignable)
- Equipment and personal property above threshold value
- Tax attributes (NOLs, credits) — note transferability limits [VERIFY]
- Pending litigation claims or recoveries
3. Beneficiary Designations
| Beneficiary | Type | Legal Name | Role | Allocation % | Contingent |
|---|---|---|---|---|---|
| B-1 | Primary | Shareholder / Creditor / Officer | |||
| C-1 | Contingent |
Special designations:
- Minor beneficiaries → identify custodian or trustee
- Entity beneficiaries → confirm authorization to receive
- Creditor priority → note statutory distribution waterfall [VERIFY state law]
- Special needs beneficiaries → flag for supplemental needs trust review
4. Distribution Methodology
| Method | Use When |
|---|---|
| Percentage allocation of liquidation proceeds | Assets to be sold; pro-rata distribution |
| Specific bequest of identified asset | Named asset to named beneficiary in kind |
| Staged distribution schedule | Ongoing wind-down, contingent assets, disputed claims |
| Liquidating trust | Complex assets requiring post-dissolution management |
Tax and equalization:
- Identify built-in gain assets; note IRC §§ 331, 336 implications for C-corps [VERIFY]
- Include equalization language for in-kind assets of unequal value
- Address transfer taxes, recording fees, and cost allocation
5. Distribution Timeline
Day 0: Plan adopted / triggering event
Day 1–30: Appraisals finalized; creditor notice period [VERIFY state law]
Day 30–X: Liquidation of sale-designated assets
Day X: Creditor distributions (priority per state dissolution statute)
Day X+Y: Equity holder / residual beneficiary distributions
Final: Certificate of dissolution filed; administrator discharged6. Contingency Provisions
| Scenario | Plan Provision |
|---|---|
| Beneficiary predeceases | Specify alternate or redistribution among survivors |
| Beneficiary disclaims | Specify timeframe (≤9 months for tax purposes [VERIFY]) |
| Beneficiary cannot be located | Holdback period before escheat to state unclaimed property |
| Asset value materially changes | Rebalancing or pro-rata adjustment mechanism |
| Disputed asset | Escrow agent and dispute resolution mechanism |
7. Administrative Powers
The plan administrator shall have authority to:
- Sell, transfer, or convey assets
- Execute documents on behalf of the entity
- Retain professionals (counsel, accountants, brokers)
- Pay wind-down expenses from entity assets
- File tax returns and resolve tax liabilities
- Settle claims against the entity
- Make partial distributions pending final asset resolution
Dispute resolution: mediation → arbitration → [jurisdiction] court.
8. Execution Block
Per jurisdiction requirements [VERIFY state-specific formalities]:
- Authorized signatory signature + title
- Witness signatures (number per state law)
- Notary acknowledgment
- Board resolution or unanimous written consent as exhibit
- Filing requirements (e.g., plan of dissolution with Secretary of State)
- Number and location of originals
Guidelines
- Distributions to equity holders cannot precede creditor satisfaction; confirm state dissolution waterfall before drafting.
- Many states require tax clearance certificate before dissolution is final [VERIFY by state].
- Flag non-assignable contracts requiring third-party consent; exclude from distribution until consent obtained.
- Transfers of business interests may trigger securities law obligations [VERIFY].
- Insert [BRACKET] placeholders for all client-specific values not in source documents.
- Do not include account numbers or SSNs in the document body; reference by exhibit.