How do I Make the charachter die when it falls off the screen?

If the player falls off the screen how do I make the player sprite die and loose a life?

How do I make it so that the player starts with 3 lives and when the player dies they lose one?

Lives are usually global variables, make one called Lives with initial value 3. Then you can say if player is not on screen (is on screen inverted), trigger once, subtract 1 from Lives.