Clients often ask us which documents, records, and papers they need to keep in their homes. When determining which documents to shred and which ones to keep, it is important to point out that one should always be careful to destroy any documents that may include sensitive personal information before discarding them. Those who ascribe to the notion of “better safe than sorry” always have the option of scanning their documents and storing them electronically.
With that introduction, we can divide documents into three separate categories:
- Those that can be discarded after a short while,
- Those that should be kept either in paper or electronic form for a longer or indefinite period of time, and
- Those when the original copies should be kept in a safe place.
Examples of documents that can be discarded after a short while include ATM receipts, bank deposit slips and receipts for small purchases; these should be kept anywhere from one to three months. Documents that should be kept for a slightly longer period of time include pay stubs, monthly mortgage statements, utility bills and expired insurance information; these should be kept for about one year.
Electronic or paper copies of tax returns, investment statements, medical bills and claims, bank statements, mortgage and loan documents (after the loan term has concluded) should be kept for approximately seven years (although the increased popularity of online banking has obfuscated the need for paper statements for many people).
There are several documents that should be kept in some form indefinitely, and there are documents for which the paper form is either strongly preferred or required. Documents that should be kept indefinitely include medical records, education records, pension plan documents, retirement plan records, medical and burial instructions, deeds, bills of sale, and home improvement documentation. Official government documents such as birth and death certificates, marriage licenses, divorce papers, passports, Social Security cards, military discharge papers, and business licenses should always be kept in their original form.
It is crucial that documents which may be required for Medicaid planning be retained, and many estate planning documents should be held indefinitely in their original form. Important estate planning documents include the last will and testament, powers of attorney, living wills, health care proxies and various forms of trusts. While many of these documents can be replicated from a digital file or physical copy, it may be difficult, time-consuming and expensive to reproduce them.
Additionally, many financial institutions require an original copy of a power of attorney and will not accept photocopies. It is often advisable for the attorney who supervised the execution of a will to retain the original will in a fireproof file. The reason for this is that if the client takes his original will and it cannot be located after the client dies, there is a rebuttable presumption that the will was destroyed and thereby revoked. However, when the attorney holds the original will, if anything should happen to the will the attorney can submit an affidavit to the court and the will would still be admitted to probate.
Medicaid is a means-tested program, so documentation regarding pensions, Social Security benefits and financial accounts are scrutinized for the five years preceding the application. The nuanced requirements that the Social Security Administration has implemented with regard to Medicaid eligibility can be quite confusing and overwhelming. Thus, it is important to consult with an experienced elder law attorney when planning for Medicaid.
Written by Ronald A. Fatoullah, Esq, principal of Ronald Fatoullah & Associates, a law firm that concentrates in elder law, estate planning, Medicaid planning, guardianships, estate administration, trusts, wills, and real estate. Attorney Fatoullah is a Member of the National ElderCare Matters Alliance. and he and his firm are Featured Members of ElderCareMatters.com – America’s National Directory of Elder Care / Senior Care Resources for families.