Spring Cleaning for the File Cabinet

by: Smith and Howard Wealth Management

If you are one of the many who takes on the challenge of spring cleaning, you are probably at or near the end of that arduous process; after all, summer is only a month away. Before you consider it done, however, consider adding your file cabinet to the list of areas to address.  Ensuring that you retain important documents for the appropriate amount of time may save you trouble and frustration down the road.


The IRS has a standard window of three years in which it may audit you, but some errors may increase that window to six years.  Moreover, states may have a longer open window because they assess taxes after an IRS audit.  As such, tax returns and supporting documents should generally be retained a minimum of six years.

Estate Planning Documents

Hopefully, you have had important documents such as wills, trusts, powers of attorney, healthcare directives, and living wills drafted and executed.  First, be sure that the terms of such documents are still in keeping with your wishes and that those individuals whom you have appointed to serve are still appropriate.

Second, give thought to where you keep such documents.  While a safe deposit box may be a suitable place to store wills and trusts, it is not a good location for powers of attorney and healthcare directives.  These documents may be needed in an emergency (i.e. after hours) and access to a safe deposit box is limited to the bank’s operating hours.  A small, fireproof safe in your home works well for this purpose.  We would also like to have copies of your estate planning documents at Smith and Howard Wealth Management to ensure that your accounts are registered properly in conjunction with your overall plan.

Other Documents to Save Indefinitely

  • Property records – Receipts and other documents to help prove your cost basis for ownership of real estate, stocks, insurance policies, collectibles, and other significant assets
  • Loan payoff letters
  • Birth and death certificates
  • Alimony, custody and prenuptial agreements
  • Partnership agreements
  • Deeds, mortgages, bills of sale, titles
  • Medical records
  • Inventory of household property

Other Items

  • Bank records  (4 years -shorter if available online)
  • Credit card records  (4 years -shorter if available online)
  • Utility bills (1-2 years)
  • Medical bills (after payment)   (6 years)
  • Insurance policies (after expiration)  (6 years)
  • Tax return documentation (7 years)
  • Retirement account annual statements (Keep until retirement)

Last, if you have access to a document scanner, consider scanning your documents and storing them on one of the many free document storage websites available online (Google Docs, Microsoft SkyDrive, Dropbox, etc.).  Storing electronic copies of your important documents in the “cloud” helps reduce your paper burden, protects your documents from perils such as fire and flood, and makes the information easily accessible to you from anywhere with Internet access.  Smith and Howard Wealth Management also maintains an online, secure “vault” for storage of important client documents.  Please contact us for more information on how to use your online vault.