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Do you have tips on organizing my financial records?

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Recent flooding in Utah has increased awareness of the importance of keeping valuable, hard-to-replace documents in a safe place. Organizing financial records and documents takes time, but the peace of mind that comes from accomplishing this task is invaluable.

Every family should ask these questions: 1) If the person who handles the finances becomes incapacitated or dies, would the person taking over have easy access to important documents and information? 2) Would the family and/or business keep running smoothly during this transition? 3) What frustrations would someone experience if they had to become the accountant or business manager for the family or business?

Financial experts recommend storing documents in three separate locations: in a safe deposit box at a bank or credit union, in a fireproof safe at home and with an attorney, relative or friend. Consider these tips for organizing your financial records.

A safe deposit box at a bank or credit union is the best place to store hard-to-replace documents. These include automobile titles, birth certificates, death certificates, personal property inventory, property deeds, marriage documents, stock/bond certificates and legal documents. Safe deposit boxes are relatively inexpensive. It is important to note that banks and credit unions can legally “seal” your box upon notification of your death, and it takes a court order to have the box unsealed. Visit with your bank/credit union and your family to ensure that everyone understands how to access the box upon your death or incapacitation.

A fireproof safe or box at home works well for storing canceled checks, recent tax records, insurance policies, a living will, power of attorney, your original will, trust documents, warranties and a list of what you have stored in your safe deposit box. When investing in a fireproof safe, buy one that is large enough to store your important documents, but small enough to move by yourself if you have to evacuate your home. Unfortunately, even a fireproof safe can melt in a very hot fire. However, a safe will withstand fire much better than a shoebox or cardboard box.

The third place to store original documents or copies is with an attorney, relative or friend. Duplicates of these documents should also be stored in your fireproof box at home or in a safe deposit box. The duplicates may be originals or copies. Make a list of what you have stored and where it is located. Indicate whether it is the original or a duplicate.

Another important aspect of organizing financial records is to set up a financial information binder for quick reference to your financial standing. An organized binder will help you manage your financial affairs and will also help the person managing for you if you become temporarily incapacitated or die.

To compile a financial information binder, you’ll need a three-ring binder, at least 16 index dividers and clear page protectors. Label the dividers with titles that are important to your family or business finances. The following can be included: financial goals list, personal directory, professional directory, personal property inventory, financial statements, cash-flow statement, spending plan, bank and brokerage accounts, list of credit cards including toll-free phone numbers, social security benefits statements, location of documents, acquisition and sale of assets, income tax information, paycheck stubs and credit reports.

Be sure to store each document in a page protector under the correct category. The binder will be used often, so it is important to use page protectors to keep the documents clean and in good shape.

In the personal directory section, list each family member and friend who should be notified in the event of a death in your family. Include the executor of your will and the location of your burial plot. Also include the Social Security and military discharge numbers of your immediate family members. These numbers will provide quick reference information if you or your representative need to apply for benefits.

In your professional directory, include your employer and spouse’s employer and every professional involved in your affairs, including your physician, dentist, clergy, lawyer, accountant, insurance agent, banker, financial agent, real estate agent, etc. This list, along with your personal directory, will be helpful to your representative in the event of accident or death.

Store a copy of your financial notebook in a fireproof box, with a friend or in a safe deposit box and keep the original on hand for the ongoing management of your financial affairs.

USU Extension offices throughout Utah have copies of a financial information binder in their offices for reference. Contact your county Extension family and consumer sciences agent for more information.

Posted on 1 Jul 2005

Adrie Roberts
County Director, Family & Consumer Science Agent, Cache County

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