by Jim Slaughter

Originally published as "Organized Documents Help You and Your Family" in The Business Weekly of the Greensboro News & Record

"A place for everything and everything in its place." So advised the Scottish author Samuel Smiles in his essay Thrift.

Unfortunately, most people are less than orderly with their important personal documents. However, following Smythe's advice through an organized records management system offers several benefits, including:

  • Satisfying the Internal Revenue Service
  • Proving losses to insurance companies
  • Disputing the records of a bank or credit card company
  • Providing information to others upon your death.

In arranging your records management system, two inquiries act as important guides. First, which documents do I need to save and for how long? Secondly, how do I provide others with information on my possessions and location of important papers in the event of my death?

What and How Long to Save

A difficult aspect of records keeping is deciding how long to keep important documents. Keeping all documents forever is hardly better than discarding them all. Sentry Group, a manufacturer of safes, recommends that different documents be kept for different lengths of time. Some records should be kept indefinitely. These include passports, adoption papers, custody agreements, deeds, health records, and inventories of personal property including purchase dates and serial numbers.

Other important documents should be maintained for various minimum lengths, depending on type. Contracts should be stored for at least seven years after their expiration. Insurance policies should be kept four years beyond expiration. Bank and credit-card records should be maintained six years. Mortgage and loan papers should be kept three years after the final payment is made.

The Internal Revenue Service provides that tax records must be kept "as long as they are important for any federal tax law." At a minimum, the statute of limitations runs out three years after the due dates of any given tax return. However, in some cases the statute of limitations on tax returns does not run out for six years. The only safe course is to maintain tax documents a minimum of six years after filing.

Information to Your Survivors

Although document organization is important, even greater care should be taken to provide information to others for use after your death. Many headaches can be saved by taking the time to list where necessary papers are located.

Two primary methods are used to inventory important documents for others: a document locator and the testamentary letter. The information in each of these is fairly identical.

A document locator is simply a list of where to find important records. This list is kept at home with other important records. Copies can also be given to children or to an attorney. The advantage of a document locator is that it can be easily updated as the information changes.

A testamentary letter is a informal letter to your family and advisors to aid in settling your affairs. While a testamentary letter is not a legal document per se, it can explain where necessary papers are located and express your wishes.

The essentials of either a document locator or a testamentary letter are as follows:

  • The date on which the document was prepared.
  • Name, address and telephone number of your attorney.
  • Location of your will and any trust instruments.
  • A list of any and all bank accounts including names, addresses, and account numbers.
  • Any and all insurance or annuity policies.
  • Lists of all stock, bond, real estate, mutual fund, and other investments.
  • Safety deposit box and key.
  • Location of receipts and appraisals for valuables and any legal documents not kept in your safety deposit box.
  • Complete information regarding any personal loans you owe or are owed.
  • Copies of all tax returns for the past three years.
  • Names and addresses of all representatives and agents, including accountants, bankers, attorneys, brokers, insurance agents, and doctors.

Neither the document locator nor the testamentary letter can bind others as to how your affairs will be handled. However, both are simple and effective tools in helping your family settle your estate more efficiently.

Maintaining an organized filing system is an effective personal management tool. Providing information to others about your important documents can save later headaches and heartaches. Samuel Smile's admonition from a hundred years ago is still timely advice.

Articles are intended to provide general information and are not legal advice or a legal opinion. Specific questions should be directed to an attorney at Law Firm Carolinas or to another lawyer.

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