Can I shred this? — A Guide to Document Retention

The community shred event is right around the corner. It feels great to shed the weight of stacks of old documents. For some of us it also carries some anxiety because it’s difficult to know exactly what’s worth holding on to. Here’s a brief guide to help you get your documents in order before shred day.

It’s best to keep a scanned copy of all your important files. For most documents, a digital copy saved to the cloud is sufficient. However, here’s a list of documents that I believe it’s important to keep the paper originals.

• Estate planning documents (Wills, trusts, powers of attorney, healthcare directives, etc.)

• Death certificates

• Marriage certificates/divorce decrees

• Titles/deeds — if you still own the property

• Social security card/birth certificate/adoption records

• Military records

• Passports and citizenship or residency papers

• Vital health records

For most documents, there’s no need to keep the original. It’s still important to have a digital copy of the following documents but once they are backed up, I shred the originals.

• Investment account statements — Most recent monthly and year end

• Insurance policies — Especially declarations pages

• Tax returns — Keep at least 3 years, consult your tax professional to see if it’s longer

• Tax related documents - W-2, 1099, etc.

• Business formation documents

• Records from buying or selling a home

• Rental agreements

• Ongoing contracts

• Medical bills — can be used to reimburse yourself from an HSA later

• Home improvement receipts — can be used to update your home’s tax basis

• Cleared checks — after 14 days

It’s also advisable to store your digital copies in more than one place. For my clients, I offer to store critical documents on my file storage. This provides them with an additional backup but also means that in the event of an emergency their family will have access to critical estate planning documents right when they need them.

Here are some documents you can put directly into your shred pile:

• Old bank statements

• ATM receipts

• Credit reports

• Expired credit or debit cards

• Old drivers licenses or passports

• Out of date prescription information

• Lapsed insurance policies

About 1 in 5 Americans have experienced identity theft and that’s no joke, Jim. Protect yourself by bringing your documents to the annual community shred event on the first Saturday in May at the F.C. Tucker Advantage office at 1013 Indianapolis Rd, Greencastle.