Spring Cleaning Your Files in 4 Steps
Hopefully, you have finished your spring cleaning by now and your taxes are filed for another year. That makes this a great time to turn your attention to cleaning out your file cabinet and those boxes of papers that are cluttering up your home office, basement or attic.
Sound like a daunting task? Tackle these steps slowly, using an hour here and there as time permits.
1. Categorize your paper
Documents (digital or paper) to be kept usually fall into one of six categories. Note: You do not need to keep most documents in paper form, even for the IRS. Rather you can scan them and save them electronically.
Common Documents and Retention periods:
Keep 7 years (or more)
Keep while you own the items
Keep for the calendar year
Keep less than a year
Keep most recent
2. Protect your identity by shredding:
Cross-cut or confetti shredders are most secure. Also look for free shredding events in your area.
3. Store documents appropriately
Store permanent documents in a fireproof safe or a safe-deposit box. Electronic files containing personal and financial information should be password protected. (Make sure someone has access to your storage areas and passwords upon your death.) Documents can be filed based on the type of document (bills, statements, etc.) or based on how long to keep it.
4. Update old estate planning documents
As you are filing your documents, consider:
Of course, if you work at home, own a business, have properties or businesses in other states or have other circumstances, different retention rules may apply. Please contact your attorney with specific questions.