How far back to keep paperwork?

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How far back to keep paperwork?

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My mother-in-law passed away unexpectedly last week from a stroke. She saved everything, and I mean everything. So I’m sorting through all of her papers and documents and we are not sure how far back we are supposed to keep them. Five years? Ten? She stowed every bill, statement, receipt, note, lottery ticket, everything, since the dawn of time. She did have a will but we do not know all of her assets yet. So how much, and what, should we hold onto right now? Thanks all.

My husband‘s older brother is POA but is co-executor with my husband. There are no other living relatives besides them.

Elder Law Financial Planning

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I am very organized so here are some tips. First of all, I would take ALL PAPERS and put them into one neat stack by date order. Then once you have done that, take each piece and start a pile by category. For example, take all old bill receipts into one pile; all medical records into one pile, and keep going until you have them sorted out by category and date order. Then take the least difficult pile and start looking at the individual papers. For example, if it is a bill from many years ago, and there are no current due bills for that bill, then you could most likely toss that. However, do keep papers showing renovations and repairs for the last seven years (check IRS on this). Same for legal. If you find an old legal document, see if you have the newer version and keep them together. Eventually, you will have documents in piles by category and date - this is a good starting point to develop the big picture. I just do not understand why people refuse to keep their affairs in current order. There is NO excuse for not doing this.

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Once they have sorted out probate then I would keep financial documents for the period the IRS require, but nothing should arise once probate is granted so its a bit of excess precaution but certainly I would keep financial things the IRS could ask for. Until you have probate keep everything - get a stack of A4 envelopes and files different things in different envelopes so easily found and stack them in file storage boxes so executors can find anything they need easily.

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IRS will usually only consider the last 7 years unless there is some IRS problem from further back that is not resolved. So look for the prior taxes and make sure those are solid. If everything is OK there, you can toss anything older than 7 years unless it involves deeds, car titles and any other high ticket item to show ownership.

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LoopyLoo: Firstly, I am so very sorry for the loss of your mother in law and send condolences. Perhaps it would be wise for you to seek the counsel of an elder law attorney.

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I am sorry for your families loss.

May The Lord give you grieving mercies , wisdom and understanding to deal with this.

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Just barely destroyed all of FIL's paperwork. He's been gone 17 years. All that remains is one deed to a piece of property in NM which is worth $600. He paid $3,000 for it 35 years ago.

Kind of sad, really. A whole life ends up being contained in one legal sized envelope.

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Frisse Kater (Youtube), puts this all in perspective.

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My mom passed away 14 months ago and I am so glad that I kept every piece of paper that was in her apartment. She had a will but I still had to go back through the papers. I had sorted it into files which made it much easier to find things. The accountant told me to hang on to everything for several more years.

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You must get a probate attorney to guide you through this process. As I understand it, you have about one year to settle her estate, which includes paying any debts. You need to make an accurate assessment of all her assets, account numbers, beneficiaries and contact person for each asset (life insurance, stocks, IRA's, mortgage statements, bank accounts, house payments, etc) Obviously keep any financial records and medical bills for the last few years that could impact the closing of the estate. Your probate attorney will let you know what's safe to toss.

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I had to do this for my aunt, who was very disorganized with her money and accounts. Depending on her financial position, her estate may have to go into probate. If she had a will, the executor is responsible for gathering her assets and distributing them to the beneficiaries. If there are assets, you may benefit by having an attorney who knows how to handle estates, and ask them to explain the process to you. Keep at least the last statement of every account that she had. The funeral home notifies Social Security/Medicare of her death and should provide death certificates for you (there may be a charge for additional certificates). I needed many of them for my aunt who had multiple accounts. Additional statements will come in until they are notified by her estate's executor that she is deceased. If the accounts have to continue (for example, utilities and property tax payments until the sale of a house), they should be changed to the name of the estate, or to the beneficiary if probate is not required. Do a search of Unclaimed Property (it's with each State's Treasury Department). For my aunt, I had to do it for a couple of states where she had lived. I found a lot of her money in Unclaimed Property. Keep the will if you find it. Keep her last utility, rent or tax bills. Her estate should pay any pending and ongoing bills until everything is distributed to the beneficiaries. The beneficiaries then have to change the titles and names of the accounts over to their names.

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Actually IRS can go back 20 years if they suspect fraud.

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I think if your dead, they wouldn't pursue it. Family cannot be held responsible.

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IRS rules on retention of data, which varies by the type and conditions surrounding the use of data.

https://www.irs.gov/taxtopics/tc305

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Thank you for the IRS link.

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They used to say canceled checks 7 years but banks don't give checks back anymore. I think income tax forms 5 years. I have all Moms papers in a box. Her whole life in one box.

Mom was in an AL and then LTC. So I kept the bills from the AL and AL info. I kept statements for two years showing where I paid out to the AL and to the LTC until she went on Medicaid.

I kept the Medicaid records. Her application, lien info and payment of the lien. The lien info I will keep 5 years.

I kept her State ID and Social Security card. Her and my Dads birth certificates and baptism records.

She paid no income taxes because she only received SS. She passed penniless.

I kept the deed to the house (house was 125 yrs old, deed very interesting) and all mortgage info showing it was paid off. I kept all the realtor info.

She did have shares that I was able to transfer over to me so I kept her records on them.

I kept all Probate papers. And records I had kept for the final accting. I got small amounts of money after her death so kept track who they were from and what they were for. You should have a lawyer for probate. I did the initial filings but needed the house, that was left to my brother, put back into the estate. Needed a lawyer for that and he went ahead and finished Probate for me. So nice. Ask the lawyer what you may need for the final accting.

I kept no bills, like utilities, over a year old. Mom had no charge accts. But, if Mom owes a balance, keep the last year. Her statements, if she was like my Mom what went in came out so unless there were some big expenditures, maybe the beginning and end of one year and into the next year.

I sat on the floor with all of Moms papers. I made piles. She had receipts for things that had been paid off and were gone. Receipts for Dads life insurance that she had cashed it. She had the policies. You should check with the company to make sure any policies were cashed in. I had a shredder nearby. So then that left me with less piles that I went thru again.

Its overwhelming but you just have to think, will we need this for anything. Mom died in 2017. Every year or so I go thru the box and get rid of paperwork no longer relevant. I am hoping after five years I can get her paperwork down to a pouch the funeral home gave me. It really comes down to, she is gone. If anyone comes after her for money, sorry there isn't any and I am not responsible.

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Taxes need to be kept 7 yrs. That’s how many years they can go back if your audited.

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I keep everything 7 years, except brokerage statements and real estate transactions which I keep forever. Always keep those in case I need to establish original value or sale info. My husband keeps airplane records forever.

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How far back to keep paperwork?

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