It’s the time of year when we normally turn to cleaning out closets, garages, etc.
We have boxes, bags and armfuls of items to donate or trash, but what do we do with those items that need to be cleaned out of our home offices?
Here’s a quick guide to financial spring cleaning.
This is the question I am asked about most often – how long should you keep them? Seven years. That’s how long the IRS has to audit you. Your chance of being audited is quite slim, unless you raise a red flag with excessive deductions, strange items, listing Fido as a dependent, etc. Estates, businesses and the bigger fish are more likely targets.
Investment Account Statements
One year, unless there are gains/losses to support information claimed on your tax returns. Then, they should be kept with your tax information. Otherwise, I recommend keeping them for the shorter time period to track activity. You should be able to track cost basis, performance and any other needed information through separate reports from your advisor.
Investment Performance Statements
I recommend keeping these for the life of the investment. That way, you can track how well the investments have performed and how the advisor has done, and you can keep the cost basis information, if it is not provided elsewhere.
Documents, such as birth and death certificates, marriage licenses and divorce agreements, should be kept permanently. Estate planning documents such as wills, trusts and Powers of Attorney should be kept as long as they are in force. If they have been updated by a new version, then the original version should be destroyed to avoid confusion. In fact, an older version of a will could actually be probated and cause a great deal of harm.
Real Estate Documents
These documents should be kept at least for the time you own the property. I would also continue to hold for as long as needed for tax purposes.
Other documents, such as utility bills, etc. should only be held for as long as you would need the information – for example, to be able to obtain account numbers and prior billing information.
I recommend disposing of old information by shredding with a crosscut shredder to protect against identity theft. To learn more ways to prevent identity theft, visit our website
to read our article, “Defend Against Identity Theft with Common Sense and Skepticism,” from July 2017. It has several great ideas to protect yourself!
Old North State Trust, LLC (ONST) periodically produces publications as a service to clients and friends. The information contained in these publications is intended to provide general information about issues related to trust, investment and estate related topics. Readers should be aware that the facts may vary depending upon individual circumstances. The information contained in these publications is intended solely for informational purposes, is proprietary to ONST and is not guaranteed to be accurate, complete or timely.
Susan Willett is the director of trust services and oversees all aspects of trust administration for Old North State Trust, LLC. Old North State Trust, a North Carolina chartered trust company, provides: asset management services; income, estate and trust tax consulting; retirement planning and administration; and trustee and estate services to both individuals and businesses. Old North State Trust professionals have many years of experience and for over a decade have assisted clients in identifying and reaching their financial goals. For more information, visit www.oldnorthstatetrust.com or call