It hardly seems fair that as soon as we pay bills, review statements, manage family calendars and school cubbies for the month, all of this ironing out will inevitably become all bunched up again when next month’s paperwork requires the same attention.
When it’s our own personal finances, it is easier to put aside organizing—waiting until we have the time. This could be months down the road for busy people because let’s face it, who isn’t overextended these days?
But, when we find ourselves in the position to manage the finances and household bills for our elderly parents, this is one job that requires careful attention to detail because you will need to account to siblings, attorneys, and the IRS eventually.
Here is the approach I took to getting my mother’s financial house in order.
First, the visual of the mess I walked into. My father managed the finances for the duration of my parent’s fifty-four year marriage. My mother preferred to manage the home and these roles worked well—until he died. She upended any system he put into place and when I arrived on the scene it was mine to figure out from cascading mountains of paperwork. Literally.
For the thirteen years after his death, she would open the mail, then re-stuff the statements into shoeboxes that would line bookshelves, bureau drawers, and stay tucked beneath beds when there was no more room on tabletops.
Can you see it? The scope of what these thirteen years of statements amounted to ended up taking me a few years to unravel.
Perhaps you are wondering what could be so important from that long ago that I would even need to bother taking the time to sleuth through it all.
I can tell you the moral of this story in one line—do not throw away any paper until you understand what it means to your parent’s financial picture. It will not matter that you will need to dig through 200 empty checkbook cartons because the first one you opened had $50 cash hidden inside. It will not matter that you have amassed eighty-five bankers boxes filled with decades of statements to sift through at your leisure while you work to make sense of the portfolio and uncover where any assets might be hidden.
Do your due diligence. You will sleep better at night knowing that you unearthed every account, every safe deposit box in town, every long term CD you stumble upon just because you are willing to do the job the right way.
The wrong way would be to hire a clean sweep crew who will charge you an attractive rate and send strangers in to cart away all the mess you don’t have time to deal with. They are counting on this. It’s how they make their living because they will find cash that is hidden in places you never looked.
Believe me, your obligation is to understand the paper trail before you beginning shredding. I toiled summer after summer when school was out to piece together fractions of clues to find money that was never listed on spreadsheets or statements.
Glad I did. We were running out of cash near the end and I was at the beginning of looking into a reverse mortgage to stay afloat for however long my mother’s decline would last. It was only then that I found the bulk of her wealth in the form of stock certificates from the 1940s that had never been registered. Imagine if I had just shredded these like everything else. They were in the eighty-fifth box of papers and did not look familiar to me. Thankfully, Charles Schwab knew just what they were.
Stage 1: Sort Paperwork into Categories: Long-Term, Short-Term, Monthly
Long-Term—understand old history
Every statement I uncover from every dark corner of my mother’s house that is not dated within the past 12 months, is filed as long-term—something I can peruse later when I have the time to gain some insight about accounts that are active, or have merged, or have been cancelled in the years since my father’s death.
I never recommend bankers boxes for permanent storage, (think flooding!) but temporarily, they are an affordable way to clear clutter from the house.
Label carefully, this will save you oodles of time when you are searching later.
Bundle years for each new box: “Archive 1990-1995”, “Archive 1996-2000.”
Short-Term—monitor recent history
Every statement dated within the past 12 months is filed as short-term—these will be immediately transferred to your filing system once it is set up.
Label as current year: “Active 2017.”
I make an alarming discovery once I go through archives vs. active accounts—my mother’s home insurance has been forcibly terminated for failure to pay. Somehow it got missed and once this happens, you are dead in the water.
You cannot return to the insurer who carried your policy for 35 years, and you cannot reinstate a home policy without a new roof inspection. It will not matter if your roof does not leak—ours was still good—there will likely be some work needed when it comes to old houses. So if you do not have the financial reserves, be careful to never find yourself in this predicament.
Monthly—alpha and chrono order for filing active accounts
I still work with paper. Online banking is great for quick pay, but I am more comfortable perusing month-to-month statements when I need information.
I buy a short filing cabinet and unload the entire contents of the “Active” box—all mail pertaining to the current year—and I sort paperwork into piles in alphabetical order using yellow sticky notes to post the alphabet along the hallway wall, filing each statement accordingly.
Assign a hanging folder by labeling a Post-it note with the company’s name found on the statement. Be sure to file most recent month on top, with subsequent months behind it.
A binder can also work when you have fewer accounts to manage, following this same alpha and chrono set up. However, the girth can make this weighty.
Discarding—be careful about what you throw into the garbage
I follow the sage advice to not throw anything into the garbage that has identifying information: your name, address, social security number, credit card numbers, telephone, birth date, checking account number, any financial statements, even credit card offers you consider to be junk mail.
Be prudent. When you are certain you understand what these papers mean to your parent’s wealth, shred or burn your important papers. For the kind of bulk paperwork my mother has, I choose a shredding service which has very affordable rates and will send a truck to our house. Many times, churches, or local community centers will offer neighborhood shred days. The best part is seeing your heavy load turned into confetti within seconds.
Daily Drop Spot—keeping the household organized
When paperwork arrives before I have the time to address it, I like to use a safe drop spot where I know it will still be waiting when I look for it. Mine is a basket with a lid. I reserve a “man drawer” in the kitchen for my husband. My students tell me their busy Moms create a cubby for their backpack storage, plus a personal In/Out two-tiered box with a colored folder for each child so permission slips and homework are always in the same place.
Avoid the Financial Scavenger Hunt—
One thing that could have saved me immeasurable time was to have a list of where safe deposit boxes were held (and keys located) or CDs with their maturity dates. The more we can organize, the more of a gift it will be to those left behind.
Once you figure out what your needs are, it is so much simpler to find the system that will work best in managing the paper trail.
“How to Streamline Your Rx Collection” will be the next blog posting here.