What to keep, where to store, and when to shred

We are often asked, “Do I need to save all of this paperwork?”  We will walk you through what you need to keep, where we recommend you keep it, and when you can discard it.

Permanent records and documents that cannot be easily replaced should be stored in a safe and secure place, with protection from water, fire, and theft.  A bank deposit box or a fire and burglar resistant safe are good choices for these documents.

Permanent records include birth certificates, cemetery deeds, divorce decree, guardianship arrangements, health records, household inventory with photos, insurance policies, letter of last instructions, marriage certificate, medical directives, military discharge, passports, power of attorney, social security cards, trust documents and wills.

These original documents should never be discarded unless they are updated or replaced.  Copies of these documents should also be given to appropriate individuals, such as trustees, executors, and attorneys.  Also, you may want to consider scanning the documents and saving a copy electronically to a storage device or web-based storage.

Temporary documents, on the other hand, can typically be stored in a locked filing cabinet.  You can destroy these items once they become outdated.   For documentation related to an item reported on your tax return, you may need to keep the paperwork long after the underlying asset or income is gone to support your tax filings.  For other documents, a general time for keeping records is seven years.

Temporary records include annuity contracts, employment contracts, home/real estate purchases and improvements, loan agreements, passwords, pension and retirement plan documents, property tax assessment, receipts for items under warranty stapled to the warranty, receipts for expensive items, tax returns and their supporting documents, vehicle titles and registrations.

Most of your bank statements, credit card statements, and investment account statements can be accessed online alleviating the need to save these.

To save time, it is also helpful to keep an updated inventory list of all permanent and temporary files.

When it comes time to dispose of your outdated records and files, invest in a personal, cross-cut shredder or utilize a professional shredding service.  Shred any item that contains social security and account numbers, birth dates, or any other sensitive personal information.

If you have questions about what to keep or when to discard a certain item, reach out to us or contact your tax advisor or attorney.