How Long Should I Keep Financial Records of Deceased Relatives

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Small Law Survivor
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How Long Should I Keep Financial Records of Deceased Relatives

Post by Small Law Survivor » Sat Jan 12, 2019 11:28 am

I have large volume of documents from my deceased father (2010) mother (2012) and mother-in-law (2010). i was legally responsible for settling my parents' estates.

These include estate tax returns, income tax returns and property transfer records (we sold primary residences of my parents and my MIL the year they passed).

We are trying clean out our basement, and my wife keeps asking me how long we need to keep these files. We've never had to refer to them since we boxed them up seven years ago, and I have no reason to think we ever will.

Can I toss them now? If not, when?

Thanks in advance.
67 yrs, semi-retired lawyer, 50/40/10 s/b/c, 70/30 dom/int'l. Plan:4% until age 70, 3% when social security kicks in. Boglehead since day 1 under diff names

Gill
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Re: How Long Should I Keep Financial Records of Deceased Relatives

Post by Gill » Sat Jan 12, 2019 11:40 am

It appears all the estates are closed and considerable time has elapsed. I'd toss everything except the estate tax returns.

Gill
Last edited by Gill on Sat Jan 12, 2019 7:39 pm, edited 1 time in total.
...just “chiming in” as described by Livesoft

btenny
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Re: How Long Should I Keep Financial Records of Deceased Relatives

Post by btenny » Sat Jan 12, 2019 11:49 am

I really do not know but the internet (how accurate???) says 3 years is good enough for most stuff but 7 years worst case. So I say 7 years should be totally safe.

https://www.google.com/search?rlz=1C1CH ... NuvQvr0zvw

Good Luck.

cas
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Re: How Long Should I Keep Financial Records of Deceased Relatives

Post by cas » Sat Jan 12, 2019 11:53 am

I found the final tax return my father had done for my grandmother in a box in the barn.

I happened to notice that the accountant my father had hired to do the return had reported all the accrued interest (five figures worth) on my grandmother's EE savings bonds (which my father then inherited) on the final return. (This was a good thing to do, since she died very early in the year, resulting in a very low tax rate on the interest.) Whether because my father was was never told or because he had too much going on with grief/settling the estate or because he didn't understand, this fact had never made it into my father's generally thorough EE savings bond records.

My father now has dementia, and I'm in charge of his finances. I certainly copied out those pages of the tax return, added them to the EE savings bond records, and attached a note to the actual savings bonds (mature 2023) in the safe deposit box. (There's an extra step in reporting the EE savings bond interest when the bonds do mature, in order to avoid paying tax on that five figures worth of interest twice.)

So that is one thing to look for before tossing records, since apparently the deal on EE savings bonds in late 1980s/early 1990s (mature late 2010s, early 2020s), caused a lot of people who are now elderly (or deceased) to buy them.

Leesbro63
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Re: How Long Should I Keep Financial Records of Deceased Relatives

Post by Leesbro63 » Sat Jan 12, 2019 11:55 am

Why not digitize those records and keep forever?

Typ997S
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Re: How Long Should I Keep Financial Records of Deceased Relatives

Post by Typ997S » Sat Jan 12, 2019 12:00 pm

I waited 5 years on my Mom’s relatively simple (2 heirs, uncontested, no surviving spouse) estate. Nothing magic about 5, but it seemed about right.

quantAndHold
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Re: How Long Should I Keep Financial Records of Deceased Relatives

Post by quantAndHold » Sat Jan 12, 2019 12:08 pm

Leesbro63 wrote:
Sat Jan 12, 2019 11:55 am
Why not digitize those records and keep forever?
That sounds like a lot of work for something that can probably be thrown away right now.

The IRS has three years after the last tax return is submitted, and even if the executor forgot to close probate, in many states probate closes automatically if they don’t hear from the executor for three years. I would check the laws of the state in question on this.

If the estate is distributed, taxes are paid, and at least 3 years have passed, I would toss it all.

We found the hard way that if probate has been closed, it can be reopened if there’s a reason to. For example if you find a new asset that needs to be distributed. The probate court still had a copy of the will and all the other paperwork from the original probate. Proving that the person trying to reopen probate had standing to do it was interesting, but that’s an unrelated issue.

J295
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Re: How Long Should I Keep Financial Records of Deceased Relatives

Post by J295 » Sat Jan 12, 2019 12:13 pm

We have 7 years of tax returns and work papers. When this year's return is filed the oldest records will be tossed.

inverter
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Re: How Long Should I Keep Financial Records of Deceased Relatives

Post by inverter » Sat Jan 12, 2019 12:20 pm

I think seven years tends to be the standard. But as a previous poster said, if you think you'll have problems, why not digitize?

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Kenkat
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Re: How Long Should I Keep Financial Records of Deceased Relatives

Post by Kenkat » Sat Jan 12, 2019 1:03 pm

When my in-laws passed away, we had two boxes that we sorted all of the paperwork into. The first box held all of the detail like old statements, confirmations, correspondence, etc. The second box held the important paperwork. Tax return information, a most recent statement, other important paperwork like Army discharge, etc. We got rid of the first box once the estate was settled and all monies distributed. We went through the second box after about two years, kept a few things such as a final tax statement and a few other memories (for example, father in-law’s WWII paperwork) and disposed of the rest.

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Small Law Survivor
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Re: How Long Should I Keep Financial Records of Deceased Relatives

Post by Small Law Survivor » Sat Jan 12, 2019 2:54 pm

Thank you all. I will digitize the "key" docs, and toss the rest, although I do confess to having some nostalgic attachment to this material (for no rational reason I can think of).
67 yrs, semi-retired lawyer, 50/40/10 s/b/c, 70/30 dom/int'l. Plan:4% until age 70, 3% when social security kicks in. Boglehead since day 1 under diff names

Sidney
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Re: How Long Should I Keep Financial Records of Deceased Relatives

Post by Sidney » Sat Jan 12, 2019 2:59 pm

I keep the valuation reports as of the date of death for the securities transferred to the beneficiaries of the estate in case one of them needs information for stepped up basis. They received this when the transfers were made but these reports are small so not a big deal to retain in case they misplace them.
I always wanted to be a procrastinator.

itsf8
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Re: How Long Should I Keep Financial Records of Deceased Relatives

Post by itsf8 » Sat Jan 12, 2019 3:06 pm

My accountant said to hold estate returns forever (I have a binder w/the backups.) So this isn't the case?

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Artsdoctor
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Re: How Long Should I Keep Financial Records of Deceased Relatives

Post by Artsdoctor » Sat Jan 12, 2019 3:07 pm

Sidney wrote:
Sat Jan 12, 2019 2:59 pm
I keep the valuation reports as of the date of death for the securities transferred to the beneficiaries of the estate in case one of them needs information for stepped up basis. They received this when the transfers were made but these reports are small so not a big deal to retain in case they misplace them.
This, I would do. As long as you have the investment, you'll need to have some documentation of the basis. If the basis was reset on the date of death, I would definitely keep that documentation as long as the investment remains.

Otherwise, I would toss everything.

itsf8
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Re: How Long Should I Keep Financial Records of Deceased Relatives

Post by itsf8 » Sat Jan 12, 2019 3:13 pm

Thank you. Yes, we still have the holdings so I'll preserve the basis info.

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Watty
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Re: How Long Should I Keep Financial Records of Deceased Relatives

Post by Watty » Sat Jan 12, 2019 3:24 pm

Small Law Survivor wrote:
Sat Jan 12, 2019 2:54 pm
Thank you all. I will digitize the "key" docs, and toss the rest, although I do confess to having some nostalgic attachment to this material (for no rational reason I can think of).
Some of the things could be interesting for the genealogical information. You might keep one small folder of interesting looking documents just for that since they might be interesting for some descendant years from now. These may not be the real key documents either since even something like a canceled check that was returned is already pretty much ancient history.

stan1
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Re: How Long Should I Keep Financial Records of Deceased Relatives

Post by stan1 » Sat Jan 12, 2019 3:34 pm

My parents kept many of their papers going back into the 1950s to 1970s. When I was cleaning out their house I threw most of that away even some relating to various side business deals my dad had and the house my mom was selling at the time (2013). I figured I'd be better off saying "we don't have records of that" in almost every case where someone might ask.

Some people are more sentimental than others. I'm a minimalist. When I was cleaning out their papers I found the insurance statement covering the costs of my birth (co pay was $35). Some people would have saved it. I shredded it along with boxes of other stuff.

bsteiner
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Re: How Long Should I Keep Financial Records of Deceased Relatives

Post by bsteiner » Sat Jan 12, 2019 5:27 pm

I would keep the estate tax returns, since they show the basis information, GST exemption allocations, and other useful information.

afan
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Re: How Long Should I Keep Financial Records of Deceased Relatives

Post by afan » Sat Jan 12, 2019 7:18 pm

Bsteiner
Can we assume pdf's would be fine for that purpose. No need for the original paper?
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2015
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Re: How Long Should I Keep Financial Records of Deceased Relatives

Post by 2015 » Sat Jan 12, 2019 7:29 pm

Leesbro63 wrote:
Sat Jan 12, 2019 11:55 am
Why not digitize those records and keep forever?
What I did. I settled the entire estate digitally for this very reason. I don't deal in paper anymore.

bsteiner
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Re: How Long Should I Keep Financial Records of Deceased Relatives

Post by bsteiner » Sat Jan 12, 2019 7:30 pm

PDF is fine, though for some people paper is easier.

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