Essential Document and Record Keeping in the Age of Digital Records

As we move further toward a paperless world, we do not realize what a puzzle we are leaving for our family or fiduciaries. It has become so common to receive bank statements by email that there are no paper records of the account at all in our homes.  We are often reluctant to dispose of paperwork, but puzzled about what documents to retain. We wonder what should be kept in our safe deposit box and how we should inform our family and/or fiduciaries of the whereabouts of our documents. If you are incapacitated, your agent under a financial power of attorney will need information about your assets and obligations so he can properly handle your affairs. It is very helpful to your family to have a list with the essential information about your assets, accounts, advisors, and where your important documents can be found. The following is an outline of the documents you should be retaining and what information should be included on your list.

Retaining Important Documents

Determining what documents should be retained to keep one’s financial and personal affairs in order can be a difficult task. The following is a list of important documents to retain to help properly manage your affairs:

  • Tax Records - Copies of past tax returns (keep for seven years), deductible expenses with receipts, records of income, including interest and dividends, records of tax payments, canceled checks (keep for seven years). If you have ever filed any gift tax returns, keep copies of these returns and especially any documentation showing the value of the gift at the time it was made.  Many people prepare their income tax returns on their own using tax preparation software, so make sure to print out a copy of your return to keep with your supporting documentation.

  • Property Records - Real Estate - Deeds, title papers, appraisals, records of renovations, additions and repairs, mortgage documents and payments, purchase price, closing and selling costs.

  • Financial Records - Bank statements, stock certificates and bonds and records of purchase date and price, dividend or interest payments and dates, savings certificates and passbooks, loan papers, list of credit cards.

  • Insurance and Retirement Records - Insurance policies, IRA/Keogh documents, descriptions and statements from pension and profit sharing plans, beneficiary designation forms.

  • Personal Documents - Wills, trust agreements, powers of attorney, advance health care declarations (living wills), birth and death certificates, marriage licenses, adoption and custody papers, divorce and separation papers, property agreements, military records, passport, social security records.

Other Information to Include on Your List

It may be that many of the documents listed above are documents for which you no longer retain paper copies. The following is a list of information you should have available for your agents or your executor, as the case may be, and your fiduciary can go directly to the provider (name and phone numbers) to get additional information:

  • Accountant
  • Financial Advisors
  • Medical Professionals
  • Insurance Providers and Agents
  • Lawyer
  • Banks. This can include a list of account numbers. 
  • Retirement Accounts
  • Brokerage accounts and information on stocks held in certificate form
  • Real estate information, including utility accounts, mortgage provider, insurance.
  • Credit cards and account numbers
  • Lists of anyone who owes you money
  • Funeral arrangements already made
  • Location of safe deposit box
  • If you have information on your computer or phone that you want your fiduciary to be able to access, you will need to keep a list of passwords and remember to update it as you change your passwords periodically.

Retaining these important documents will help us give you proper advice and obtain optimum results in your tax and estate planning. We will be happy to lodge your wills, trust agreements and powers of attorney in our fire-proof will safes. Most of our clients do ask us to retain such documents.

In our internet dependent world, you will need to ensure that your loved ones have access to your computer passwords and key words to access any on-line banking or investment accounts. Although access to computer information can be obtained in any event, it is a costly, frustrating and time-consuming process. The kinder step to take to assist your personal representative and your family is to provide the information in an accessible place.

What Should I Keep in My Safe Deposit Box?

Of course, original wills and trust agreements should be kept in safe fire-proof storage which may be in a safe deposit box. There is one disadvantage to using a safe deposit box, though, just when you need access to these documents, there can be challenges getting to them! Often banks will require an appointment with bank personnel to access such boxes. In the case of an executor, some banks will erroneously demand that the executor provide a short certificate of appointment, even for a will search – this is not correct! Most of our clients leave their important documents with us for safekeeping, as those documents will be more accessible, and there is no required interaction with banks or safe deposit box officials.  

Things such as stocks, certificates of deposit, birth and death certificates, settlement sheets with respect to the purchase and sale of real estate, information with respect to the improvement of real estate, life insurance policies, and notes proving loans you have made certainly should be kept in your safe deposit box. You should 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 together with canceled checks and other proof of income and deductions.

What about the deed to your house? Once recorded, a deed to real estate is rarely, if ever, needed and the deed does not require safe deposit box type security. Anyone interested in knowing the information in a deed usually will rely on the courthouse records rather than the deed itself.

This alert is intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you have We are fully operational during this pandemic and we stand ready to assist you with any of the aforementioned applications. Please do not hesitate to contact any of our attorneys with your questions and concerns.
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