Many of us still instinctively cling to the notion of keeping paper copies of everything—even electronic files we print out for posterity.
There is nothing wrong with that. Just be sure to have a filing system that enables you to put your hands on what you need, when you need it. Decide what to save (and for how long), what to shred (and when) and what to share (and with whom). Here are some important examples.
What to Save
These are important documents for the long run and should be kept in a fireproof safe or in a safe-deposit box.
As Long as You Live
- Birth/death certificates
- Social Security cards
- Marriage licenses
- Divorce decrees
- Pension plan documents
- Copies of wills and living trusts
- Military discharge papers
- Copies of burial deeds and plots
- Safe-deposit box inventory
As Long as You Own the Item
- Product warranties
- Property deeds
- Mortgage documents
- Mortgage payment receipts
- Life insurance policies
- Certificates of deposit
- Receipts for home improvements
What to Shred
These are documents with personal information such as your name, address, phone number, Social Security number or bank account number and should be destroyed after a certain period of time. Many experts agree that these documents should be shredded when no longer needed.
- Bank statements (shred after one year; hold for five years if you may be applying for Medicaid)
- ATM statements (shred after reconciling with bank statement)
- Credit card bills (shred after 45 days, unless needed for taxes, insurance or proof of purchase)
- Tax returns and supporting documents (shred after seven years)
- Retirement account portfolio changes (shred after reconciling with monthly or quarterly statement; keep proof of IRA contributions until you withdraw the money)
- Medical records (shred after five years but keep information related to prescriptions, ongoing treatment, specific medical histories and health insurance)
- Utility and phone bills (shred after reconciling with most recent statement, unless related to tax-deductible expenses)
What to Share
These are directives that normally involve another person, so you should share copies of the documents with concerned parties.
Financial power of attorney: This allows someone to act on your behalf if you are unable to do so yourself. The holder can transact business, including buying, selling, paying debts and handling real estate. Choose a trustworthy person, keep a copy of the document for yourself and share a copy with the person you name as your agent.
Health care power of attorney or health care proxy: This person makes medical decisions on your behalf if you are unable to do so. Again, choose a person you trust, keep a copy of the document for yourself and that person and share a copy with your doctor. You may also wish to share the details of the arrangement with your family.
Advance directive or living will: These documents direct whether life-sustaining procedures are desired to prolong your life when it is medically determined there is no hope of recovery. Give a copy to your doctor. You may wish to share your wishes with family members.
Bonus: Clean-Up Guide
It is easy to know when to renew your driver’s license or debit card—just look at the expiration date. But what about your estate planning documents? Keeping these current is an essential part of creating the future you envision, but they lack expiration dates. Next time you take some time to clean up your estate plan, the chart below can help.
|Document||What it is||Where to keep it||When to update it|
|Will/Living trust||These documents direct your personal representative, executor or trustee on how to distribute your estate.||In a fireproof safe. You should also give a copy to your trustee or personal representative.||Every two to five years or immediately after experiencing a life event such as:
|Financial durable power of attorney||This document allows someone of your choice to carry out financial matters for you in the event you are unable.||In a fireproof safe. You should also give a copy to the person you appointed.||If your relationship with your chosen person changes or if this person passes before you.|
|Health care power of attorney or health care proxy||This document allows someone of your choice to carry out your health care wishes for you in the event you are unable.||In a fireproof safe. You should also give a copy to the person you appointed.||If your relationship with your chosen proxy changes or if this person passes before you.|
|Advance directive or living will||These documents formalize your wishes on end-of-life medical care.||Give copies of the form to your health care provider(s).||After a diagnosis of a new or significant health issue or hospitalization.|
Did You Know…
You can leave a gift to William Penn University in your will? It would be our pleasure to help you with the process. If you would like to support our work well into the future, please contact Marsha Riordan at 641-673-1045 or firstname.lastname@example.org to learn about your many options.
Information contained herein was accurate at the time of posting. The information on this website is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor. Figures cited in any examples are for illustrative purposes only. References to tax rates include federal taxes only and are subject to change. State law may further impact your individual results. California residents: Annuities are subject to regulation by the State of California. Payments under such agreements, however, are not protected or otherwise guaranteed by any government agency or the California Life and Health Insurance Guarantee Association. Oklahoma residents: A charitable gift annuity is not regulated by the Oklahoma Insurance Department and is not protected by a guaranty association affiliated with the Oklahoma Insurance Department. South Dakota residents: Charitable gift annuities are not regulated by and are not under the jurisdiction of the South Dakota Division of Insurance.