Organizing your personal and financial documents can save a lot of hassle at tax time. It can also make financial planning less of a headache and life a lot easier for your loved ones should anything happen to you. Here are some tips for getting your documents in order:
Keep estate documents in one place. Keep copies of wills, trusts, advanced health care directives, power of attorney and other important documents in one easy-to-find file; perhaps in a safe. Don’t forget life insurance policies. Your loved ones will need access to these things in the event of your death.
Organize your personal financial documents. Keep your monthly and quarterly financial statements in an organized system. The key is to make documents easy to locate. It’s also a good idea to have past-year tax returns organized and all in one box or file.
Keep a password log. Most people have online access to a variety of financial accounts. Keep a list of passwords to make it easy for loved ones to access them if needed.
Keep tax documents in one place. When you receive a tax document that you’ll need for your return, consider placing it in a separate file. That way when it comes time to head to your accountant’s office, you don’t have to hunt around for any pertinent documents.
Put together some notes. If you’re the person who handles all of the financial matters in your house and something happens to you, wouldn’t it be comforting for your spouse to have some notes from you with information about how to manage your household’s financial affairs, such as when specific bills are due each month and when insurance premiums should be paid?