Documents to Keep Indefinitely in Your Estate and Financial Planning Process

Although in the previous three blogs, we’ve discussed getting rid of unnecessary paperwork and clutter after three months, one year and seven years, some documents should be kept on hand forever. 

This is because they are so important that you may need to reference them at any point in time and it may be a good idea to keep copies and backups. These should always be stored in a safe location, such as a box that is safe from a fire. These documents should be maintained forever:

  • Personal identification documents like your social security card or birth certificate.
  • Income tax returns.
  • Legal documents such as lawsuit settlements, divorce and marriage certificates, and estate planning materials, unless they have been replaced by amended materials.
  • Loans for your car and vehicle titles. These should be kept for at least three years from the date the transaction is finalized. This information can prove helpful long after the transaction is finished, however, so you may wish to keep it forever.
  • Educational records such as transcripts, degrees and diplomas.
  • All major receipt purchases.
  • Any relevant financial planning documents and records, like pension plan documents, power of attorney designations, burial information, medical details, and living trusts and wills.

Talk to your estate planning lawyer to learn more about how to safely store these items.


Documents to Keep For At Least Seven Years in Your Financial and Estate Planning Process


It can be difficult to figure out which documents you’ll need to have on hand, which ones should be stored in a safe deposit box and have a copy at your lawyer’s office, and those that you can eventually get rid of after some time. 

This is because there are so many different periods of time associated with holding on to particular documents, and in an effort to clear out clutter and ensure that you are legally protected in the event of a problem, you’ll need to be mindful of both. Some documents need to be kept for at least seven years before you can dispose of them safely. These include:

  • 1099 and W2 forms that can be used for tax audits and prove your income for loans
  • Tax related receipts which can become helpful if the IRS comes asking questions
  • Bank statements which should be kept for at least a year in electronic or printed form. These can be helpful if you have issues of identity theft, fraud or other challenges with your account.
  • Cancelled checks for mortgage, home improvement, business and tax purposes. Some people like to keep all of their cancelled checks, but this is an unnecessary process if you want to cut down on clutter.
  • Disability records or unemployment income stubs. Any paperwork you receive that is directly from the government related to an income source should be kept.

Consulting with an experienced estate planning lawyer in addition to other professionals on your team can be valuable for ensuring that you have the appropriate paperwork, and drafting the paperwork for your estate planning purposes when you don’t have it yet.

Documents to Keep for One Year: What You Should Know About Estate and Financial Planning

 Some documents need to be kept longer than the three-month period as discussed in yesterday’s blog. These should be stored in a safe location so that they can be accessed quickly in the event of a sudden problem, or in the event that your financial power of attorney agent needs to step in and make critical administrative or financial decisions on your behalf. 

These documents can be disposed of safely such as using a shredding service after a one-year period. These include:

  • Paycheck stubs
  • Monthly mortgage statements
  • Investment account statements
  • Insurance records and statements
  • Undisputed medical receipts and bills
  • Checkbook ledgers

Only hold on to these documents if you currently have a case dealing with the insurance company or a personal injury case.

After you receive your annual W2, there’s no reason to hold on to your paycheck stubs and your annual tax statements can be used in lieu of monthly mortgage statements. Investment account statements can include trade confirmations and monthly statements, but these materials don’t need to be kept longer than one year

Will Less Planning Occur Because Of High Estate Tax Exemptions?

Do you think you don’t need estate planning?

Perhaps you did estate planning in the past, but you think that new high estate tax exemptions mean that it doesn’t make sense to engage in this process. 

Many estate planning attorneys and clients alike, were interested in how the most recent tax bill will play out. Although plenty of people are still digging into the mechanics of what this tax bill will actually mean for people planning on the ground, the high estate tax exemption is the subject of the most commonly asked question.

Taxes are at the front of many people’s minds these days, even more so than usual. The Tax Cuts and Jobs Act will double the gift tax exemption and the estate tax exemption. However, many estate planning attorneys expect to still find themselves helping clients of all types to put together an appropriate estate plan. The biggest anticipated growth in coming years is likely to be with income tax planning, with more than 45% of those attorneys expecting to see more work.

Just over one-quarter of estate tax planning attorneys expected to see less of this kind of work for estate tax planning purposes. Many believe that the current changes to the estate tax are not likely to last over the long run, meaning that people will eventually wind back up in their estate planning lawyer’s office.

What You Need to Know About Prioritizing a Dead Spouse’s Debts

When a spouse passes away, it can be an alarming discovery to realize that they have more liabilities than they did assets. Paying off these expenses can be extremely confusing for a spouse who was appointed as the personal representative of the estate. When an estate does not have appropriate assets to pay all of the debts in full, they must be prioritized. 

The first of these debts that should be paid are all funeral expenses and any of the expenses and costs associated with administration. If the funeral expenses were advanced by the surviving spouse, those can be paid back first.

Furthermore, someone who is serving in the process of probating the spouse’s estate will be able to get reimbursed for the cost of administration, like legal fees. Next in line for debts to be paid are taxes that are entitled to preference under state or federal law. Hospital expenses and reasonable medical expenses are the next in line to be paid, particularly to the point that they relate to the final illness. If there are medical bills for treatment that was not related to the final illness, that is included in the remaining category of unsecured loans and credit card bills.

Every legitimate claim in a category should be paid first, before moving on to the next category. This can be a difficult situation for a spouse to find themselves in after the loss of a loved one when the grief and other elements of moving through the claim can be especially difficult. To understand your rights and to move forward with powerful knowledge about the future, schedule a consultation with an estate planning attorney.

What You Need to Know About the Survival of Dynasty Trust

If you are using trusts as part of your estate planning strategy, you are engaging with one of the most powerful tools for enhancing your privacy and control now and well into the future. Dynasty trusts have become increasingly popular in recent years as a tool for people to incorporate into their overall process. A trust gives a client the flexibility to change the disposition after a transfer. 

Even for many different clients who may be in the process of considering a dynasty trust when there is no estate tax, trusts are very flexible estate planning tools that also provide privacy and peace of mind for the person creating it. Dynasty trusts should always be drafted directly for the purpose of flexibility. Merger, decanting, amendment and non-judicial settlements are all different possibilities to consider in a dynasty trust. A trust that allows a trustee to make distributions for beneficiaries with the absolute discretion assigned to that trustee may provide more flexibility than a trust that requires distributions made to beneficiaries with an ascertainable standard.

All of these terms can be explained to you when you schedule a consultation with a trust planning attorney. Trusts offer numerous different benefits for people creating the trust, as well as for your beneficiaries down the line. But because there have become so many options in the area of trust planning, a consultation with a lawyer is important to identify the tool that is most appropriate for your individual needs.

Top Questions to Ask Your Estate Planning Attorney After the Passage of The New Tax Law


Now that the new tax law has come into place, plenty of people are thinking about what they need to do in order to protect themselves and their future. This often warrants a conversation with your estate planning lawyer, who can tell you more about what you need to know. An estate plan often needs to be updated based on your individual circumstances as well as shifts in state and federal laws. The aggressive tax reform that was recently passed should prompt you to schedule a consultation directly with an attorney. 

Ensuring that your plan is up to date can make things much easier for your loved ones in the future. The following questions should be considered by anyone who believes that an update to their estate plan may be in order. Even if you are not yet sure whether you need to revise your strategies or existing documents, a lawyer can help point you in the right direction and give you greater peace of mind about the future. These top questions include:

  • Will my estate tax picture be impacted by the new federal law?
  • How does my marriage or divorce get affected by the exemption limit?
  • Do I have to worry about any state estate taxes because of a property I own in other locations?
  • Are my estate documents customized to avoid unintended consequences and carry out my individual wishes?
  • How soon should I schedule another review of my estate plan?


The Best Gift You Can Give Is Investing for Your Heirs


Teaching your grandchildren and children to invest is an investment in their own future. This means you are passing down your own individual legacy and the financial expertise you have built over the course of a life time. This is why many grandparents and parents set up brokerage accounts to give family members an early start on investment opportunities.

Recent changes in U.S. tax laws, however, have changed the dynamics associated with multi-generational investment planning. It is often more important now for older generations to keep their appreciating assets with the primary purpose of helping their family members and beneficiaries avoid paying taxes on any of the gains. 

In the past, estate planning typically emphasized maximizing the annual exemption gifts and finding ways to get discounted values for gifts tax purposes on any assets that were transferred. However, in light of the new tax laws, currently on the books, investing for heirs now makes more sense. The ability to get a stepped-up basis at death has survived numerous versions of tax reforms.

This gives every member of the current oldest generation in the United States the opportunity to pass down assets to their beneficiaries that could avoid up to $11.2 million in potential capital gains. The best way to implement this strategy is to schedule a consultation with an experienced estate planning attorney and to hold the assets in your own name. You would then invest these as though you are holding on to them on behalf of your heirs. This may seem a more aggressive investment strategy than what you are used to, but younger investors will gain advantages because they do not have to worry about the same amount of market volatility that could impact an older generation.

Should You Increase Your Gifts Given to Your Children?

When thinking about passing on assets to future generations, a common question asked by many people is whether or not they should increase the amount that is passed on to their loved ones. With the passage of the tax cuts and Jobs Act, the lifetime exemption for estate taxes doubles to $11.2 million for individuals and $22.4 million for married couples.

How you choose to pass things on to your loved ones can make things easier for you as well as them.

The lifetime gift tax exemption has also doubled to these same tax amounts. Gifting opportunities in light of these new regulations have to do largely with timing issues and magnitude. The previous increases in these laws have been much more gradual, making it more difficult for people to adapt their gift tax plans now. Consider the impact of a gift to your children on their lives, particularly when you intend to make the gift outright.

It is much easier for many people to pass on an asset or to write a check than to have a serious conversation about the various responsibilities that come with receiving wealth. There may be advanced issues in your unique family situation that should prompt you to contact an attorney about estate planning tools. These could include spend thrift children and addiction issues.

Revocable Living Trusts and Tax Treatment

If you were thinking about putting together a revocable living trust, this can be a powerful estate planning tool. It is one often chosen by people who want to avoid the probate process.

Numerous delays and expenses may be associated with your estate having to pass through probate, which prompts many people to put together a revocable living trust to make things easier for their loved ones in the future. 

There are many different types of trusts, but revocable living trusts do not have a special tax treatment associated with them.

This is because the owner of this trust is still classified as the owner of the assets, so you will have to continue reporting income and earnings on your individual tax return as you did in the past. Revocable living trusts can help you avoid the problems typically associated with probate, but not those associated with the estate tax system.

A living trust may include provisions like language to generate a bypass trust upon someone’s death, but these same kinds of provisions are often included in wills or other estate planning tools. Talk to an experienced estate planning attorney today to learn more about the benefits of scheduling a consultation to put together a revocable living trust.