Taxes - Head Matters

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9. Keeping Good Records 


Papers to keep in safe deposit boxes

Every family household has some important records. Each of us should have a birth certificate or an acceptable substitute. Since there are many occasions when the information on your birth certificate will be needed and it is important that you keep it in a safe place, preferably in a safe deposit box available for a low cost at banks or credit unions.  If you have lost or misplaced birth certificates, consider applying for replacements now before you need them.

Other important documents to be kept in your safe deposit box include marriage certificates, divorce or other legal papers regarding dissolution of marriage, adoption papers, death certificates, citizenship records, service papers, and any other document that is either government or court recorded.   The website, http://www.cdc.gov/nchs/w2w.htm, has a listing of where to write to get these records in the United States. 

The original copy of a will, in most cases, is kept in the safe of the attorney who prepared it. This is highly desirable, since it may save complications later. The client receives two copies, one of which may be put into his or her own safe deposit box. However, there could be a legal delay in getting this copy at his or her death. The third copy, therefore, should be kept at home where it is readily accessible.

Some of your important papers, such as investments, are of a business or financial nature. Certificates for securities are non-negotiable (can't be sold or legally transferred) until they are signed by the owner. Nevertheless, such certificates can be lost or stolen, and the signature can be forged. In either case replacement involves both cost and delay. Such certificates then, when not left with the broker, should be kept in the owner's safe deposit box.  Government bonds can be replaced without cost, but there will be a delay of several months. So it is best to keep these in the box also. Among other investment-type documents that require safekeeping are papers that serve as proof of ownership, such as deeds for real estate, other mortgage papers, contracts, automobile titles and leases.

If you don't have a safe deposit box, then consider getting one. The yearly rental, at your bank or credit union, is inexpensive. Often the smallest size is adequate, though larger sizes are available at slightly higher charges. If you do have a safe deposit box, ask yourself if it is large enough to hold everything that should be in it-and small enough to keep out things that don't need to be there. If you store documents from investment properties or securities, the rental can be claimed as a deduction for income tax purposes. The box should not be used as a catchall for souvenirs and unimportant papers.
 

How to get a safe deposit box 

Most banks and credit unions offer safe deposit boxes. If you are already a customer or member of a bank or credit union, it’s probably easiest to simply ask that bank or credit union about their safe deposit boxes. If you don’t currently use a bank or credit union, opening a safe deposit box is easy to do at the same time that you open your checking or savings account. However, if you don’t yet have any of these important documents, or if you are a minor and your parents keep the documents for you, it’s probably best to wait as there is usually a monthly charge.


A guideline as to what goes in and what stays out of your safe deposit box might be: Put it in if you can't replace it or if it would be costly or troublesome to replace. Many items can be replaced rather easily. Copies of insurance policies can be obtained from your insurance companies. Copies of cancelled checks are usually available at your bank. Generally speaking, you do not need to keep the following in a safe deposit box: income tax returns, education records, employment records, bankbooks, social security cards, guarantees, and burial instructions.

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