I am settling my parents affairs and also trying to purge some files in anticipation of downsizing. I’ve read a bunch of articles online about what papers to save and what to toss, but I am curious what real people do and how they store things.
Investment statements - I have a box of these! I’ve read that you can just keep the December statement and shred the rest. True?
Explanation of Benefit forms - I have shredded all of these on my parents. I can go online and pull up the last year’s worth, should any stray medical bills still come in. What about for those of us with chronic conditions? Do you save them once the bill arrives?
529 Statements - both my kids are graduated college and we spent all the 529 money :). Safe to shred? It just feels so weird to purge this much paper!
Bank checking account registers, credit card statements, pension plan statements . . .it’s amazing how much paper is still generated even with paperless options for most things.
I need to look into bulk shredding. The guy at Staples is starting to recognize me.
Could depend on if the December statement rolls up all of the information from the previous statements during the year for that account. Also, whether the statements are available online.
I’m terrible about this. I have everything for 7 years…just in case…which I know is totally stupid. I have a bunch of boxes in the basement. At some point I need to purge.
I know where I live in New Jersey the local libraries have shredding fundraiser events where they will shred a bag or box for something like $10 and the library keeps the profits. See if you can find a local shredding fundraiser - it will save you money.
Regarding your parents’ records, it seems you may be wondering what to do with records outside of settling their estates.
For estate records, it may depend on whether estate taxes, and type of probate. I’ve heard keep supporting records, such as receipt from initial purchase, appraisals, and similar, that help determine fair market value at date of death, for a number of years.
Also regarding records supporting tax returns in the last year or two of life, I’ve seen recommendations to retain three to seven years.
If the new capital gains rules on estates goes through, you may need decades of records to establish your basis in the stocks. As it stands now, when your parents die, you would inherit the basis, the stocks value on the date they died. Then when you sold the stocks, that would be the floor for capital gains. But the new rules (as I understand them) would mean going back to the date your parents bought the stock as the basis, IOW no stepped up basis. This means much longer record keeping, a record nightmare in many cases. The same would be true for real estate and other investments in the estate.
I’ve got a great elder/estate attorney who did my folks wills and POAs etc before they died. And I had set my parents up with the same financial planner friend I use, so he is familiar with their investments and is working with the attorney as we settle their estates. And it is only complicated because they died 4 days apart and I think an IRA had some rules about 'simultaneous" deaths or something, that are not 30 days apart. It’s not a big deal because I am an only child and everything was eventually going to come to me in some fashion.
I am keeping their tax returns for now. It was very hard to get rid of all the doctor bills, EOBs, medical notes etc because I had been caring for them for the past 7 years. I kept some records of things in case I ever need them for my own medical history.
I’ll have to ask my financial guy how much he can access online and I’ll look at my December statements.
Also, a long time ago (25+years?) my H had some stock options in his company which we cashed in when he left. I can’t see any reason to keep those records, and it is a lot of paper!
I’m not even going to get into all the sentimental stuff. Sheesh.
I’d be totally screwed as my parents’ records didn’t go back that far and I know they’ve held on to some of their stocks for a very very long time. We may need to get creative in what we sell off it it looks like the new rules are going to go through.
Anything that I think is important to save (ie tax returns) or unsure about what to do, I scan, save to external hard drive, then shred originals. Otherwise I shred everything with my or W’s name and address on.
I am glad H is a document pack rat. I started calculating what price we might get for our home and the possibility of owing capital gains on the sale. Luckily, H has all the documents showing what we spent on capital improvements on our house over the last 25 years so we can document it for the IRS.
