07/28/2014 - What To Keep and What to Throw Away

(Part Two of Two)

Your patience has paid off -- this week you get to learn what documentation should be kept indefinitely or permanently. Should you have further questions about what to keep or purge, don't hesitate to continue the conversation @PattiSpencer via Twitter.

Keep Indefinitely

Documents that establish income tax basis for assets should not be discarded. Deeds and receipts for home improvements that can be added to the cost basis of your home should be kept as a tax record until the home is sold and then kept as a tax record for an additional six years.

Records relating to investments, IRA's, Keogh plans, pensions, insurance contracts, and other contracts should be kept until the transaction has been fully completed and/or all funds have been withdrawn (which sometimes means indefinitely) and then kept as a tax records for an additional seven years.

Lists of credit cards, credit account agreements, and statements should be kept until the account is closed or if they are needed for tax purposes, then kept as a tax record for an additional seven years after the account is closed.

Deeds, title insurance, title abstracts, mortgage and other lien documents should be kept as long as the real estate is owned and then kept as a tax records for an additional seven years.

Motor vehicle titles, purchase receipts and licenses are kept for the duration of the period of ownership.

Mortgage documents are retained until the debt is satisfied and satisfaction recorded.

Records of holdings of stocks, bonds and other investments should be kept as long as they are owned and then kept as a tax records for seven years.

Keep Permanently

Birth certificates, adoption records, military records, marriage certificates, divorce decrees and property settlement agreements, custody agreements, and proof of naturalization for naturalized citizens should be retained permanently. Your current Will, Power of Attorney, Medical Directive, Living Will, Trusts, or other estate planning documents should be kept in a safe place. Do not ever throw away a social security card, diplomas and/or transcripts, medical history, employment records, insurance policies, passports, cemetery deeds, military service records, or beneficiary designations. A list of valuable possessions, documents and advisors should be kept in a safe place as well.

If you are a person who has managed your affairs independently, or have been very private about your financial matters, as most people are, you will be giving your spouse, children, or significant others a great gift by being selective and organized with your financial records in the event you ever need assistance with handling your finances.

Until next week,
-Patti Spencer