The Importance of Earnestly Organizing Documents

Posted on Friday, August 17, 2018

The paper trail that follows us throughout our lives includes records that track births, deaths, marriages, divorces and adoptions -- among other life changing events. Personal records also document purchases, investments, assets and home improvements.

Organizing records may not be the most enjoyable task, but it gives you a full picture of your finances and lets you handle tax and other money disputes efficiently and with supporting documentation.

Keep in mind: The better organized you are, the better you can manage your affairs, support claims on your tax returns, and be certain that your heirs can easily find the paperwork they need.

Here is a list of some important documents you need to save:

Taxes -- Copies of past returns; receipts of deductible expenses; income statements including any interest and dividend earned; tax payments, and cancelled checks. Keep these items for as long as the statute of limitations requires.

Real estate -- Deeds; title papers; appraisals; records of renovations, additions and repairs; mortgages and receipts of payments, and records of purchase prices and closing and selling costs.

Finances --Bank statements; stock and bond certificates; mutual fund records; records of purchase dates and prices, dividend or interest payments and dates; savings certificates; savings passbooks; loan papers, list of credit cards.

Insurance and retirement --Insurance policies; IRA documentation; descriptions and statements from pension and profit sharing plans; beneficiary designation forms.

Personal documents --Wills; trust agreements; powers of attorney; living wills; health care proxies; birth and death certificates; marriage licenses; adoption and custody papers; divorce and separation papers; property agreements; military records; passport, and Social Security records.

Once your files are organized, don't fall into the trap of saving unnecessary documents. Clean them out periodically. And decide where to store the documents. For example, a safe deposit box for originals and a fireproof filing cabinet for copies. The important thing is that the papers are safe and your loved ones know how to access them. Your future -- and theirs -- depend on it.

Keeping Papers Safe

A safe deposit box can be an effective way to protect your will and trust documents. Note: If a safe deposit box is held at a bank and the names of your heirs are not on it, they may have to get a court order to open it after your death.

In fact, all important papers should be stored in a safe deposit box, including stocks, certificates of deposit, birth and death certificates, documents related to buying and selling real estate, life insurance policies, and notes proving loans you have paid.

But you don't have to store everything there. You can keep records of credit cards, other insurance policies, major purchases and warranty information in a safe place or dead storage, but not necessarily in a safe deposit box. The same applies to copies of income tax returns filed within the last three years and the canceled checks and other receipts you save to prove your income and deductions.

The deed to your house is rarely needed and doesn't require safe storage. Anyone interested in it can rely on courthouse, city or town records.

Keeping an original and a copy of important documents is a good start, but it may not be adequate. Natural and man-made disasters illustrate the importance of backing up important data.

If you have only one copy of your documents stored in a bank vault and the bank is destroyed, your records may be gone too, or at the very least, some important material may not be accessible for several weeks.

Make triplicate copies of important documents and store them separately. And make sure your attorney or trusted family member or friend knows where your important papers are and can readily access them.

Posted in Estate/Trust

Disclaimer: The information contained in Dulin, Ward & DeWald’s blog is provided for general educational purposes only and should not be construed as financial or legal advice on any subject matter. Before taking any action based on this information, we strongly encourage you to consult competent legal, accounting or other professional advice about your specific situation. Questions on blog posts may be submitted to your DWD representative.