Different documents have different amounts of time that they should be kept.
Tax returns, home sale documents, estate documents, and a death certificate are just some of the things that you might have left after the passing of a loved one. A general rule for keeping documents is to keep them for 7 years after they have been filed. You could lighten up your stack of paperwork even sooner, let’s look into this further.
Three years is the limit for auditing a tax return but if there is an extreme circumstance, such as fraud, you would need to hold on to them for longer. You should also keep the supporting tax documents along with the returns, you might need them to prove your case during an audit. Anything older than seven years should be safe to shred, just keeping an electronic copy of the return for your records.
Home Sale Documents
If a loved one sold a home recently before their passing, you should hang on to the paperwork for at least 3 years following the sale. If you want to be conservative, you could keep the paperwork relating to the gain or loss on the sale of the home. Keep this with the tax return for that year.
There is not a rule on how long to hold on to estate documents, although as mentioned before a general rule for all documents is seven years. Seven years is the typical amount of time that a legal claim would need to arise. Once a will is probated, and if there were not any objections, then it is highly unlikely that you will ever need that paperwork again. The estate tax return could be audited for up to 3 years, as with regular tax returns, therefore, those should be kept.
Let’s say you shredded something before its time, there’s a chance that the attorney for your case might have some of the paperwork that you need. The death certificate and a copy of the estate tax returns are things that you should keep to show the value of any assets that you inherited. You might need this value for your own tax returns.
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