After Death: Sorting & Disposing of Personal Financial Information

Like many people of their generation, my folks weren't very good at gleaning through their personal financial records on a regular basis. Everything was just so darned important that their basement eventually developed into a catchall for 70 years worth of ephemera, personal memorabilia and financial records.

When parents pass away, the job of dealing with all this financial information falls on the shoulder of the heirs. These tips will help you sort through their personal effects and financial records, and determining what must be kept and what can be thrown away.

Don't be in a hurry. After my neighbor, Jack died some years ago, his son took a coal shovel to his Dad's personal records and threw everything into the back of a dump truck. While this method of removing personal financial information is fast, haste also means that you may be throwing out something you'll need later. Working slowly means you won't accidentally throw out important documents such as stock certificates, deeds, savings bonds, wills, and financial information related to a property or business.

Sort before you toss . When my sis and I dug into our parent's personal financial information after their deaths, we sorted before making any kind of decision. The information was then grouped into stacks of related information which were much easier to tackle. A sorting system doesn't have to be complicated. You might group those records like my sis and I did with our parents' financial records :
1. Tax Returns and Supporting Documents
2. Personal property records.
3. Legal documents such as wills, warranty deeds, birth & marriage certificates, business & real estate contracts.
4. Canceled checks and Bank statements
5. Personal financial information such as insurance policies, warranties, savings pass books, credit cards statements, and utility bills.

Once the records are sorted, you can then begin the process of disposing what is no longer needed and relocating what must be saved. The saved items should then be arranged by date.

What financial records must be kept. According to our family attorney, anything that proves ownership of valuable personal property or real estate should be kept until the estate is settled. These include:
receipts,
deeds,
certificates of water right,
vehicle and boat titles,
stock certificates and savings bonds,
certificates of art ownership,
branding papers,
and cancelled checks.

Our accountant also advised us to hold onto the folk's tax returns for a least the next 3 years, just in case of a posthumous audit.

What you CAN get rid of includes bank statements, expired insurance policies or warranties, old utility bills, pay stubs, EOBs, gas and grocery receipts, and else anything that isn't needed to establish ownership of property, personal or real. Be sure that this sensitive information is either burned or properly shredded to prevent misuse by identity thieves.

Before throwing anything away, it's always best to contact your parent's attorney first and ask what he would recommend in your particular situation. He may advise you like our family attorney did, to hang onto everything until the estate has been settled. In the case of a clouded title or questionable ownership, your parent's old financial records may be all there is to establish proof of ownership.