Spring Cleaning Your Financial Safe: A Guide to Decluttering Your Important Documents

As flowers bloom and the days grow longer, spring brings a sense of renewal and a perfect opportunity to spring clean your home. And what about your financial wellness? This season, extend your spring-cleaning efforts to include the essential documents and valuables in your safe. As always, we recommend consulting with your team of experts: attorney, tax professional, and financial advisor with any updates that may affect your plans.

Keeping a safe at home or at another secure location can be an excellent way to organize and protect important documents and valuables. In Alaska, we face many regionally specific challenges like earthquakes, snow collapses, and even a lack of emergency services in many areas. Here are some common items you might consider storing in a safe, along with general guidelines on how long to keep them.

Personal Identification and Legal Documents: Birth certificates, passports, Social Security cards, marriage licenses, divorce decrees, and wills should be kept permanently. These documents are critical for verifying identity and legal status. Life changes such as marriage, divorce, births, and deaths necessitate updates to documents like wills, trusts, and beneficiary designations.

Financial Records:

• Tax Returns and Related Documents: Keep these for at least seven years, as the IRS can audit your returns up to six years after filing if they suspect underreported income.
• Bank and Credit Card Statements: Keep for at least one year; however, if they are needed for tax purposes, follow the seven-year rule.
• Investment Records: Retain while you own the assets, plus seven years for tax purposes after selling.
• Loan Documents: Keep until the loan is paid off and then for seven years for any potential tax implications.

Property Records:

• Home Purchase/Sale Documents and Home Improvement Records: Keep these permanently or as long as you own the property, plus seven years for tax purposes after selling.
• Vehicle Titles and Maintenance Records: Keep as long as you own the vehicle; titles should be held permanently if the vehicle is a collectible or of significant value.

Insurance Policies: Keep life, disability, health, and property insurance documents as long as the policies are active and retain claims records for at least five years after settlement.

Warranties and Receipts: Hold on to these as long as you have the item, or until the warranty expires.

Valuables: Keep an inventory of your physical assets such as jewelry, collectibles, and personal memorabilia. You may consider insurance coverage or additional security measures for these items.

Safe Deposit Box Keys: If you have a bank safe deposit box, keep a spare key in your personal safe to ensure you always have access. We recommend consulting with your estate attorney to create an access plan.

It’s a good idea to keep digital copies of important documents in secured cloud storage. Alaska Wealth Advisors’ client portal has a secured cloud storage where you can store digital copies of legal documents. Also, ensure that a trusted individual or executors know how to access your safe and understand the importance of the contents. This redundancy can ensure you’re prepared for any situation.

Just as you would clean your house and prepare your garden, tidying up your financial documents is an essential part of maintaining your overall financial wellness. Feel free to reach out to your team if you think your plan may need a refresh.

Nicole “Nikki” Squires
Associate Financial Advisor

Alaska Wealth Advisors, LLC is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about Alaska Wealth Advisors’ investment advisory services can be found in its Form ADV Part 2 and/or Form CRS, both of which are available upon request. Material presented has been derived from sources considered to be reliable, but accuracy and completeness cannot be guaranteed.

1. Sources: Internal Revenue Service (IRS)
   • The IRS has specific recommendations on how long to keep tax records. Generally, they advise keeping records for three years from the date you filed your original return or two years from the date you paid the tax, whichever is later. If you filed a claim for a loss from worthless securities or bad debt deduction, keep records for seven years.
   • IRS.gov
2. S. Securities and Exchange Commission (SEC)
   • The SEC offers guidelines for investment records. They recommend keeping brokerage statements, stock certificates, and receipts for mutual funds and stocks until you sell the securities, plus an additional period for tax purposes.
   • SEC.gov
3. Federal Trade Commission (FTC)
   • The FTC provides advice on how to safeguard personal information and suggests retention periods for various financial documents, focusing on minimizing identity theft risks.
   • FTC Consumer Information – Protecting Your Identity
4. Financial Industry Regulatory Authority (FINRA)
   • FINRA advises investors on maintaining and disposing of financial records. They also outline best practices for the retention period based on various types of documents.
   • FINRA – Save or Shred: How Long You Should Keep Financial Documents