Tips on Cleaning Out your Clutter.
Should it go or should it stay? What you really need to keep.
What did you do on New Year’s Eve? Did you go out to a fancy restaurant or grab drinks with friends? Perhaps you put in some old movies or played board games with your kids. All of this is by far more exciting that what I did, or so it may seem…
I spent the majority of the day and evening on New Year’s Eve cleaning. I am one of those people that likes to start the New Year off right and right means CLEAN. I started by putting away the remaining Christmas decorations, after this I turned my attention to files. I like files. I like being organized, a place for everything and everything in its place. Each year I start a new file for taxes, bank statements, and other important paperwork and try and clean out and shred any paperwork that I no longer need. While this took me most of the day and night, I was most excited to wake up on January 1, 2017 with a clean and organized house and with my files ready to go. When I am organized I feel empowered and I am ready to take on the world.
So, what papers should you keep and how long should you keep them? More importantly, which papers are you going to potentially need should a legal issue arise in your future. There are some documents you should never get rid of the original, despite the fact as a population we are moving to a paperless, more environmentally friendly era there are certain documents that originals and original signatures are still required on.
DOCUMENTS YOU SHOULD NEVER THROW AWAY:
Estate Planning Documents – Wills, Trusts, Advanced Directives, Powers of Attorney,
Original Deeds to Real Property
Titles to Vehicles
Records of Paid Mortgages
DOCUMENTS YOU SHOULD NOT THROW AWAY (WITH EXCEPTION):
The exception being that the document is no longer active, warranties have expired, etc.
- Insurance Documents (Life Insurance)
- Stock Certificates
- Property Records
- Property Tax Records
- Stock Records
- Record of Pension and Retirement Plans
- Home Improvement Records -(Especially if claimed on taxes for rebates or qualified deductions, if claims on taxes keep the records as supporting documents to your taxes and keep for as long as you keep the applicable tax return)
DOCUMENT YOU SHOULD KEEP FOR 7 YEARS
- *Federal and State Tax Returns
- **Records of Loan Satisfactions
- Records regarding the sale of real property
- Record regarding the sale of stock
- ***Receipts or cancelled check regarding support income that was paid by you
- Annual Investment Statements
*Tax Records –Many people believe that they only need to keep tax records for three years, however the Federal Government has 6 years in which to collect money that they may be owed and for that reason it is recommended to hold Federal and State Tax Returns as well as supporting documents for a period of 7 years from the date of filing.
**Records of Loan Satisfaction -Most state have a statute of limitation on contract claims that spans 6 years. That statute of limitation runs from the time the contract was formed or since the last payment whichever is more recent. For those reasons it is recommended to hold records regarding Loan Satisfactions for at least 7 years.
***Receipt of Cancelled Check regarding Support- There are a lot of people that trust their ex-spouse or partner and even pay them support in the form of cash. Some people have support withheld via wage withholding from their check, but never keep and ongoing record. Do yourself a favor, keep track of this. If you are paying a ex-spouse or partner cash, make sure you get a dated receipt. While state government can be reliable, remember it is never a perfect system. Everyone working there is human and humans make mistakes. By being proactive and keeping track of your payments, should and issue ever arise, you will have your record of payments and that will save you time and money in the long run.
DOCUMENTS TO KEEP A YEAR OR LESS
- Utility Bills
- Bank Statements
- Cancelled Checks (Unless for Support Payments)
- Credit Card Receipts (Unless for tax purposes)
- Quarterly Investment Statements
- Sales receipts (Unless there is applicable warranty, then retain for the length of the warranty)
If there is any doubt, keep your records or at the very least keep a digital copy of them.
There are some documents that should be reviewed and updated as necessary, specifically Estate Planning documents. We often put a Will in place and forget about. Certain life events, births, deaths, divorces, marriages all can effective the validity of certain estate planning documents. In addition you may have acquired new items or accounts or your feelings about someone you once wanted to appoint to act on your behalf may have changed. Perhaps the person you once thought would have been a great person to act as your representative has now moved far away making them a less favorable option. For those reason we recommend reviewing your estate planning documents at least every 2 years and sooner if you have had an immediate family member pass away, gone through a divorce, gotten married or re-married, or have had a child either biologically or adopted.
Should you find that you need to update one of your documents and would like assistance doing so, please contact our office. We would be happy to meet with you and discuss potential changes and any of your other estate planning goals.
We understand that many of our client may not feel the need for a will. We respect your choice, but recommend and urge you to at the very least complete a Health Care Advanced Directive. A Health Care Advanced Directive leaves instruction for what type of medical treatment you would like to receive if you are unable to communicate or make those decisions for yourself. This form traditionally also has the option to appoint someone to make medical decision for you should you be unable to do so. The value of these documents is immeasurable when it comes time to make those very difficult end of life decisions. Completing one of these forms will lessen the stress on your loved ones and will make sure that your wishes are known and honored.
We hope that you have found these tips useful. We wish you a New Year filled with happiness, health, and peace.
The Attorneys and Staff of
OWENS/ PINZELIK, P.C.