As your parents get older you will want to make sure you keep their critical financial documents organized. Obtaining and retaining these documents will give you the information you need to protect your parents’ financial assets. However, how do you know which documents are important to hold onto?
What Financial Documents Should Be Kept?
|Essential records:||Keep birth and death certificates, marriage licenses, divorce decrees, Social Security cards, and the two most recent tax returns. Credit and debit card names and numbers. Investment income (stocks, bonds, property) and stockbrokers’ names and phone numbers. Any bank statements.
|Defined-benefit plan documents:||Keep pension-plan documents from your current and former employers. Also include the sources of income and assets (pension from your employer, IRAs, 401(k)s, interest, etc.)
|Estate-planning documents:||Keep copies of wills, trusts, and powers of attorney. Last mortgage payment, as well as when the payments are due. Location of original deed of trust for home and car title and registration. The most recent appraisal and property tax document (including any house/condo records).
|Insurance Information:||Keep insurance information (life, health, long-term care, home, car) with policy numbers and agents’ names and phone numbers. For permanent life insurance—policies that have a cash value or investment component. Include any Medicare and/or Medicaid documentation.
Discussing Finances with Your Parents
The information listed above should be stored in a location so that key people know where to find them (i.e. family, lawyer, etc.). To start, you should compile a list of everything above, where each item is located, and include as much detail as possible. Ask your parents the following questions to understand what types of financial documents they may have and note the location of any/all financial documents:
- Where do you store your financial documents?
- Do you have a safe deposit box? If yes, where is it and where is the key?
- Where is the most up-to-date will with an original signature located?
- What are the names of your banks and account numbers (checking, savings, credit union)?
- Do you have an accountant or financial planner? If yes, what is his/her contact information?
Take the time to understand what documents are critical to retain and others that may be more clutter than beneficial. Review the list of key financial documents, gather the information, provide the relevant detail, and store the information in the best place that makes the most sense for you.