Broker Check

Retaining Important Documents

| March 26, 2024

In the ever more complicated world we live in, it can feel like both our mailbox and email inbox are consistently overflowing with new statements, receipts, account change documents/announcements, and so on.

Whether you keep important financial and personal information documents in hard copy, digitally or (likely) some combination of both, it can be a lot to store and easily locate in a pinch. But what documents should you keep and for how long?

Below we give you some best practices to consider for retention of key documents. It should be noted that at some level every person’s situation is truly different and these guidelines are merely a starting point. If you have questions regarding any of these, it may be worth consulting with the appropriate professional (ie. your attorney, CPA, financial consultant, etc.).

Tax Returns 

  • The general rule of thumb is to keep tax records for 7 years, though the IRS warns that the actual requirement for retaining tax returns and supporting documentation can range from 3 years to indefinitely, depending upon your situation.
  • For tax records related to property, like real estate, they should be kept until the period of limitations expires for the year in which you disposed of the property. These records are important to figure any depreciation, amortization, or gain/loss on the property.

Investment Statements

  • Generally, if you receive quarterly statements that include activity and starting and ending values for the quarter, you should only need to retain those. In that scenario, you may choose to shred any monthly statements received intra-quarter once the quarterly summary is received. Many investment companies will allow for digital access to investment statements for a period of 7+ years. But remember, if you move assets from an investment company and later request documents/statements, they may charge you for the service.
  • For taxable accounts, it is your responsibility as the client to retain records of cost basis for securities purchased, especially those purchased prior to 2013. These records should be retained indefinitely, or for 7 years after the year in which the security was sold, whichever is sooner.

Insurance

  • Insurance contracts, like those for life insurance, disability insurance, long-term care insurance, should be retained in a safe location for as long as they remain in force. If there are any outstanding claims, documentation supporting those claims should be kept as well until the claim is paid and closed.
  • For property and casualty insurance (think homeowners, renters, and car insurance), the current policy’s declarations page and insurance ID cards should be retained, as well as any documents pertaining to a claim until the claim is processed and settlement is received. The main policy document may not need to be retained if online access to this document is granted.

Estate Documents

  • Original estate documents like wills, living wills, powers of attorney, and trust documents should be kept with the estate attorney’s office with whom they were drafted. Copies should be maintained in a safe location until any updates are made. Individuals who are trusted with administering these documents in the event of your death or incapacity, should be informed where these documents are stored.

Other Important Documents

  • Important documents like birth certificates, marriage certificates, divorce decrees, death certificates, vehicle titles, and the like should be kept in a safe location indefinitely.
  • Any documentation pertaining to the settlement of a lawsuit or debt or the paying-off of a mortgage should also be retained indefinitely.
  • Military discharge papers are needed for most everything related to the Dept. of Veterans Affairs and its benefits, so should be kept for the duration of your life.

Have questions about this or need a referral to an attorney or CPA? Please reach out to our office!


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Tax and legal services are not offered by NPA, LPL Financial or affiliated advisors. We suggest that you discuss your specific situation with a qualified tax or legal advisor.