It’s easy to go a little too far when you declutter. Perhaps you throw out a stack of documents, not realizing your child’s birth certificate was tucked inside. Or maybe you toss your old tax returns, assuming you’ll never need them again.
There are many financial documents you may reach for as you prepare yourself financially for life’s big moves. If they’re missing, you could face major headaches.
To avoid wasting time and money, here are the 15 financial documents you should never toss.
1. Birth certificate
You might need your birth certificate to apply for everything from a passport to a marriage license.
You probably won’t need to access this document often. But when you do need it, not having it around can stand between you and something exciting.
2. Military records
Military records come in handy for everything from verifying your service while applying for a home loan to receiving veterans benefits.
Plus, if you have children, they could also benefit from having your military records on file if there are benefits that pass down to them.
3. Social Security card
The need to show your Social Security card will come up often. Everything from filling out forms for a new job to applying for a loan to getting a driver’s license might require you to show your Social Security card.
In some cases, all you’ll need is a copy. So, it’s possible you can leave the original copy safely at home.
4. Marriage certificate
If you plan on changing your name after you get married, you may need to present a copy of your marriage certificate.
While it’s not difficult to get another copy, it’s always easier and cheaper just to have the original on hand.
5. Will
When you die, whoever is in charge of your estate must be able to access a copy of your will to ensure that everything is done according to your wishes.
Their job as executor will be much less stressful if they know exactly where your copy of the will is kept.
6. Old tax returns
It’s tempting to wash your hands of taxes come April 16, but you need to hang on to old tax returns for at least six years. In most — although not all — cases, that is the maximum amount of time the IRS has to come back and audit you.
If these records are neatly filed away, it’s much easier to provide what the IRS needs. Due to the “six-year” tax rule, you should keep many other documents on this list for six years.
7. Passport
Even if you don’t plan on traveling abroad anytime soon, you should still keep your passport.
This is another form of identification you can use in the event that your driver’s license is not available or has been lost.
8. Power of attorney
If you’re unable to make decisions for any reason — whether that’s due to travel, accident, or disability — your power of attorney determines who can make those decisions for you.
These records should be easy to locate if you become incapacitated suddenly.
9. Investment records
Like taxes, any investment records — including trade confirmations and statements — should be kept up to six years after you sell the investment.
This can help you when you are working on taxes, as the documents can be used to calculate gains and losses.
10. Loan records
You should keep loan records in perpetuity.
Whether it’s your home or student loans, you want to keep any record of payments or payoffs, just in case the original creditor returns with a claim that you still owe money.
11. Health insurance records
You should keep all health insurance records for the length of your policy.
Once the policy expires and all claims have been made, you no longer need to keep these.
12. House deed and mortgage
Whether you need to calculate how much you owe when you sell your house or simply need to prove you own the house, keep important papers around.
This includes the closing documents, deed, and mortgage. Store them safely throughout the time you own the house and after you sell.
13. Insurance documents
If you make a claim against your policy, it’s best to keep your insurance documents for at least six years.
Doing so can protect you if something comes up where you have to defend the claim.
14. Rental agreements
Keep rental agreements for up to six years after you have ended your lease.
It may be unlikely that a landlord will come after you in the years following your lease, but it’s better to be safe than sorry.
15. Beneficiary forms
Similar to estate planning documents or a power of attorney, it’s a good idea to keep copies of your beneficiary forms on hand.
If something happens where your assets are passed to a beneficiary, you want to make sure the forms get to the right place.
Bottom line
The first step is to ensure that all of the documents you need to get ahead financially are in order, but the second is to have a safe place to store them.
Make sure you have a secure safe to store these documents so you will know exactly where to find them when the time comes.
If you want to go a step further, organize them with a list of what’s stored inside the safe so you can easily reference the exact document you need when you need it.
Should you be in the midst of a divorce or contemplating divorce, contact the Law Offices of Renee Lazar at 978-844-4095 to schedule a FREE one hour no obligation consultation.
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