How Long to Keep Financial Documents for Estate Planning
Estate planning is the methodical way of organizing personal affairs and financial matters to ensure that the future possibility of certain death and mental incapacity is taken care of. Your initial estate plan includes either four or five vital estate planning documents that are legal depending on the family’s current situation and its financial situation. Apart from all these important documents, your state laws may dictate the different estate planning documents created. Therefore, an estate planning attorney may guide you with all the preparation of the estate planning documents needed in the situation.
Most financial documents are kept, while others are tattered and tossed. Before making such decisions, you should have knowledge about what is important to keep and for how long. In addition, you should also know what documents to shred. With a good organization structure will prevent chaotic documentation when choosing what to keep from what to shred. However, people still get confused about what to keep. Therefore, for financial and estate planning purposes, The Mattar Firm can advise you on the documents to be kept indefinitely and those that are kept for a shorter period.
How long to keep financial documents for Estate Planning?
Three months or less
The receipts stated below should be disposed of after 1-3 months to avoid clutter in offices or homes. The bank statements will keep records of all the transactions and can be proof of all the payments done within a period.
- Credit cards
- Utility bills
- ATM receipts
- Day to day purchase receipts
One year
- Mortgage statement- the monthly statement will be redundant after the annual tax statement.
- Records and insurance statements-renewal of policy makes the previous one obsolete.
- Checkbook ledger-most is kept online by use of accounting software. If you go an old fashion way of the handwritten checkbook ledger, then it could not last for over a year.
- Paycheck stubs-when stubs are reconciled annually, there is no need of keeping them.
- Undisputed bills (medical) and receipts- when bartering with a carrier of health insurance, when injured in work environment, ensure you keep the receipts as evidence for at least a year.
- Investment account statement-trade confirmations and monthly statements should be kept for at least a year.
Seven years or less
- Tax-related receipts- justification of your tax deductions in case IRS will need them.
- W-2 and the 1099 forms- these prove of your income for tax audits and loans.
- Bank statements- can help you identify identity theft, fraud, or any other anomalies affecting your account.
- Disability record and the unemployment income stub- when you receive income from the government, keep these documents.
- Canceled businesses, tax checks, home development purposes, and mortgage- keep the ones that are relevant.
Forever or Indefinitely
- The income-tax returns-Hold into the returns for future purposes.
- The legal documents- marriage or divorce certificates, the lawsuit settlements
- Loan documentation and/or vehicle tittles-after a finalized transaction, hold the documents for three or more years for safety.
- Major purchase receipts- this is kept for warranty purposes and shows value in case of an insurance claim.
- The retirement account statement and annual investment- match the quarterly statement with the annual one then shred them if they match the annual statement. You can, therefore, keep the later.
- Individual identification documents- Birth certificates, passports, and social security cards.
- Receipts and/or documents of real estate holdings-mortgage documents, renovation receipts, title deeds, and documents of a property. As long as you ow the property, keep the documents and an additional 6 years after selling the property.
- Education records- certificates, transcripts, diplomas, and degrees
- Relevant financial planning record- the wills, trust documents, attorney’s power designation, living wills, medical information, and burial information.
- It is extremely challenging to keep up with proper documentation even though you may have an organized system. Figuring what documents to keep and what to shred, and knowing which one to keep for what period time may be stressing. That is why at The Mattar Firm we give a helping hand. Allow us to plan with you. For more inquiries on how long to keep financial documents for Estate Planning, kindly contact one of our estate planning lawyers.