After the death of a loved one, there are a lot of steps to take. From arranging a funeral to grieving the loss, how do you keep track of everything? If you opt for a virtual service on a platform like GatheringUs, there may be specialists who can guide and support you through the planning process.
One commonly overlooked task is how to handle financial documents. In the age of identity theft, you must know how to handle these documents safely and securely.
Jump ahead to these sections:
- Personal Checking and Savings Account Statements
- Business Checking and Savings Account Statements
- Investing and Retirement Account Statements
- How to Handle Documents After Death
How long do you need to keep your loved one’s bank statements after they pass away? Is it better to keep everything just in case? How do you ensure your documents are secure? In this guide, we’ll answer all these questions and more.
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Personal Checking and Savings Account Statements
When it comes to personal checking and savings account statements, you don’t need to hold onto as much as you think. In fact, holding onto this information longer than you need to could make these documents a target for identity theft.
According to the Internal Revenue Service (IRS), the statute of limitations for an audit is three years. Because of this, you should keep your loved one’s tax documents for at least three years.
The rule of thumb is to save them for a maximum of seven years. Aside from tax documents, you don’t need to hold onto much else long-term. If you settle bills and close accounts, it’s time to shred these documents.
Forms to keep
What do you need to save when it comes to personal financial information? Use these suggestions as a guideline.
- Death certificate: You should have at least ten copies of the death certificate. These are necessary for closing accounts and managing any other financial matters.
- Funeral expenses: Keep track of any funeral expenses and taxes since these might need to come from the estate.
- Recent W-2 forms: A W-2 form is a personal income statement used for tax purposes. You should keep a hold of the most recent W-2 forms, but feel free to dispose of older ones safely.
- Personal income tax returns: As we said earlier, your loved one’s tax statements should be saved for up to seven years.
- Deed and property titles: If your loved one had property, secure these deeds and titles until the sale of the property.
- Charitable donation records: This refers to any records of charitable donations as well as receipts for these donations. These are for tax purposes.
- Form 1099: A Form 1099 is for miscellaneous income. Keep these statements with any tax documents.
- Bank statements: Finally, hold onto all bank statements until you close all accounts. Keep a record of the closing.
- Loan documents: Keep any documents relating to the payoff of loans. For example, some student loans may be forgiven after death. Either way, you should secure records of these accounts closing.
Business Checking and Savings Account Statements
Business checking and savings accounts have a greater significance than personal statements. Businesses are often tied to employees, partners, contractors, and other entities. And, businesses are open to stricter tax laws under the IRS and are more likely to face auditing.
Keeping track of business account statements is key until all affairs are in order. Making sure everything’s settled could take months or years, and you might still want to keep a copy just in case. This is especially true if the business is now under someone else’s control.
Forms to keep
What forms do you need to keep for your loved one’s business? These suggestions are a good starting point. When in doubt, talk to a business attorney to ensure you’re covering everything important.
- Business income tax returns: The IRS has the ability to audit any business, even self-employed individuals, for up to six years after the filing date. This is greater than the time limit on personal returns. Because of this, secure tax returns for a minimum of six years.
- Business bank records: Business bank records, including checking and savings account statements, show what expenses were paid for and when. As such, you should hold onto these documents. They could be useful in the case of an audit. Save them for seven years for tax purposes.
- Employment tax records: You must retain all employment tax records related to employees or contractors for at least four years.
- Canceled checks: Keep all canceled checks, even if they don’t have tax significance, for about seven years.
- Credit card statements: When it comes to business credit card statements, it’s a good idea to hold onto yearly statements for up to seven years. As for monthly account statements, these are no longer needed.
Investing and Retirement Account Statements
Finally, you’ll also want to pay attention to investing and retirement account statements. These are essential to estate planning. Assuming your loved one had a will and testament, the passing on of these funds and assets should be clear. If there was no formal will, the matter might need to be taken to probate court.
Because these forms relate to funds and assets, don’t overlook them. They’re usually one of the first things you’ll handle after the death of a loved one.
Forms to keep
There are a lot of investing and retirement account statements worth keeping. Ideally, your loved one stores these forms somewhere easy to access, usually with their will. Otherwise, their employer might have more information about the existence or location of such documents.
- Stock or bond ownership certificates: Keep any stock or bond ownership certificates. These need to be transferred to the next of kin, and you’ll need the certificate to initiate this process.
- Retirement account statements: Keep all recent retirement account statements. Again, these funds transfer to another relative. The statements ensure no money is lost in the process.
- Retirement plan documents: Retirement plan documents include pension paperwork, annuity contracts, and so on. The employer should have more documentation about these plans and what comes next.
- Life insurance policy: Keep all documents relating to the life insurance policy until the death sum transfer is complete.
- Homeowner insurance policy: The homeowner insurance policy might offer coverage in the case of death. Either way, retain these records with property information.
How to Handle Documents After Death
How do you handle these documents above? Because identity theft is a real threat, you’ll need a strategy for keeping these forms and papers above safe. Follow these document safety tips below:
- Label all folders and files with your relative’s name and the year
- Don’t keep things longer than you need to
- Use a secure filing cabinet or folder
- Keep your loved one’s documents separate from your own
- Store backups online in a secure cloud folder
While it might seem smart to hang onto everything, this isn’t always the case. Keeping things too long puts your relative at risk of fraud or identity theft. Having more papers means it’s more likely you misplace something along the way. Theft is more common than you think.
How do you dispose of documents securely? The most crucial step is shredding. Never throw anything away without shredding it first. To take it further, use a dark marker to block out any names or identifying information before destroying them.
When securing documents online, be careful about what service you use. Cloud security is a revolutionary way to secure your files. However, you still should pay close attention to permissions and access. When in doubt, ask a professional.
Secure Your Loved One’s Documents
Nobody wants to think about paperwork after losing a loved one. However, you’re the only one able to make sure these documents stay safe and secure. It’s easy to focus on the funeral and other arrangements, but don’t overlook these documents above.
Keeping track of your loved ones’ forms protects them from fraud and helps with legal recordkeeping. This is a difficult time. Make sure you’re following the right steps to ease the burden of the entire family.
If you're looking for more, read our guide on how long to keep tax records after a death.
Post-planning tip: If you are the executor for a deceased loved one, handling the details of their unfinished business such as dealing with bank statements can be overwhelming without a way to organize your process. We have a post-loss checklist that will help you ensure that your loved one's family, estate, and other affairs are taken care of.
- Schifferle, Lisa W. “A pack rat’s guide to shredding.” Federal Trade Commission: Consumer Information. 1 May 2015. Consumer.ftc.gov.
- “Starting a Business and Keeping Records.” Internal Revenue Service Publication 583. January 2015. IRS.gov.