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Important Documents

What important documents do you need to hold on to and what should record keeping look like for them?

In this episode we discuss critical documents, records, and more that you should hang on to and why.

Questions about today's episode let us know.


(801) 476 - 1200

Full Transcript:

00;00;07;01 - 00;00;25;13

Garrett & Paul

Hello and welcome to your investment partners with Paul and Garrett, where we talk about all things financial, focusing on helping you plan, keep and grow for a successful future. If you're new to the podcast, welcome. And if you're tuning in again, welcome back and thank you for listening and welcome to your investment partners with Paul and Garrett. So I'd have you with us today.

00;00;25;13 - 00;00;44;21

Garrett & Paul

We're going to talk about a really common question that we get all the time from our clients about what documents we should be keeping. What's their purpose in different areas, including tax, health and estate documents that are important to keep all in one place. My name is Garrett Smith. I look forward to having you with us today. Good to be here again.

00;00;46;04 - 00;01;11;29

Garrett & Paul

I think today we've got cover and a common question we get from clients about what records and paperwork they need to keep. Well, one thing about our business is that they'll bury in paperwork if you let them. So many regulations and we're required so much disclosure from from the Fed, from the feds that it just, you know, kind of has to be sent out.

00;01;11;29 - 00;01;34;05

Garrett & Paul

And sometimes I wonder if we send out so much that it's just, you know, so much that people just ignore everything, which obviously is, you know, kind of not the right approach either. So the the big question about today is, you know, what paperwork do we send and what do you need to keep? So I guess I'll ask Garrett that question.

00;01;34;05 - 00;02;00;18

Garrett & Paul

I think from a high level there's records and there's notices, and any time we get paperwork, the records are we want to keep. Those are things relating specifically to a client account. Those are those month end snapshots. Year end balances and information. But then there's the other ones that are the that fall in the category of, say, trade confirmation.

00;02;01;04 - 00;02;28;24

Garrett & Paul

And those are more of notices just saying something happened in the account. And those are, in my opinion, not as critical, though they have information to you, but they're summarized in the records portion of it. So you get notices usually are duplicated from the records portion. So a common thing that happens if we sell a stock and buy another one client will get a notice saying that that trade happened, a trade confirmation.

00;02;29;05 - 00;02;48;04

Garrett & Paul

But then they'll also get that same information on their month end statement that shows what was bought and sold. And so that trade confirmation doesn't necessarily need to be kept because it's recorded in that month and snapshot. And I think as long as you have each one of those, it can give you a clear record of what's going on in the account if there happens to be any questions.

00;02;48;14 - 00;03;15;22

Garrett & Paul

So I think the most critical ones and the most important ones when it comes from a high level are the client are that are the account records, month end year end records of of what has gone on in the account. That's really if if somebody hangs on to their their statements you know all the transactions for the whole year are going to be on the on the statement and it's going to have all the information that that they need.

00;03;15;22 - 00;03;32;18

Garrett & Paul

And then in addition to that, there's tax documents that come out at the end of the year. And obviously, those are those are kind of important to you. Yeah, the tax documents are obviously on that record portion. They need to get recorded and passed over to your tax professional or if you're doing it yourself, that that they're in there as well.

00;03;33;16 - 00;03;59;06

Garrett & Paul

You know those those will cover things of what money was put in and taken out of the account. Any any taxable events, you know, ordinary income or or long term and short term capital gains. And those those need to be kept in retained. And I think we can touch on tax documents later. But those those are multi-year. You know, you want to hang on to any tax documents for for from multiple years instead of just year over year.

00;03;59;06 - 00;04;25;12

Garrett & Paul

You know kind of the month end statements. Generally speaking, if if you're keeping one year's worth of monthly statements and when the next January comes around, you're probably good to get rid of last year's January statement. You know, when the new one comes out and having 12 months of those will keep things keep things in place. We do have, you know, electric or electronic records that we can go back and pull if there's questions that can be helpful for clients as well.

00;04;26;03 - 00;04;53;22

Garrett & Paul

But maintaining those is you tax documents a lot longer of a time period than than the year end statements. So there's not really any reason for somebody to keep like ten years worth of monthly statements, right. Yeah. Yeah. There's that's yeah, there's definitely going overboard on the record retention, especially if you're maintaining the end of year records. Those those you could see the year end summary.

00;04;54;10 - 00;05;09;17

Garrett & Paul

It's a good one to keep for, for maybe longer than just one year because that kind of summarize everything that happened for the given year. So that's that just that December statement kind of has the whole, you know, kind of the whole year on there. And if you wanted to hang on that one for a little longer. Great.

00;05;10;26 - 00;05;34;27

Garrett & Paul

But the other 11 statements, not so much, right? Yeah, that's that's that's the way I look at it. Do And then I think the other category that comes in or some of those class action notices. Yeah. So what's a class action notice? Well, obviously all these companies that we own, yeah, there's always lawsuits and class actions being brought against them because they're massive.

00;05;35;16 - 00;06;07;04

Garrett & Paul

So whether they're guilty of it or not, there's just always events happening. And what happens to a client is, is one one of these comes up. All financial institutions get notified. And so they just reach out to any client that they think would have ownership into one of these companies or may have ownership into it. So it oftentimes these notices may not be directed from us, but from another financial institution that assumes or knows that you may have some of these ownership in some of the companies.

00;06;07;04 - 00;06;28;16

Garrett & Paul

And and one thing that's really nice is we've been able to team up with a third party company, Broadridge, as the name of the company and they monitor all of these that come through. And look, if there's opportunity to these or if they're worthwhile in filing and collecting them, if our clients fall into the the window because typically how those works you need to have owned a share during a certain time period.

00;06;28;16 - 00;06;50;10

Garrett & Paul

And oftentimes that time periods from 5 to 7 years ago. And so it when we go back through the records we say, yes, we owned however many shares of this company. But if but if you have owned that share in any time in those last 5 to 7 years, maybe not necessarily that six month window, you're you're probably going to get notified about it.

00;06;50;23 - 00;07;13;12

Garrett & Paul

So even though you're getting notified, doesn't necessarily mean you qualify for it. So there's kind of the two conditions that need to be met on those class action notices. I think the other problem with the class action notices is that for the for the most part, yeah, these are massive lawsuits, but they're they're divided by, you know, millions and millions and millions of shares.

00;07;13;12 - 00;07;32;26

Garrett & Paul

And so you could have a you could have a $25 million lawsuit and it spread across, you know, 100 million shares, which means it's by the time you take out attorneys fees and all that, all other stuff, it's, you know, $0.05 a share. It's $0.10 a share. And if our typical client owns, you know, 100 shares, it's it's $5.

00;07;32;26 - 00;07;53;15

Garrett & Paul

And so how much work do you want to do, you know, to try and collect $5? I mean, there's there's time involved, There's postage. There's there's all these all these problems. And that's that's why we've hired Broadridge to kind of do what they do for us. Right? Yeah. And so they'll come in and file on our clients behalf and then distribute the funds accordingly.

00;07;53;15 - 00;08;13;18

Garrett & Paul

And because when we aggregate them all together, then it becomes worth the effort versus, you know, a client here and a client there. So essentially we're saying if you get a class action lawsuit, notice you can just throw it away because we've hired a company to take care of it. If we're eligible, they're going to collect the funds and it will be deposited into client accounts.

00;08;13;26 - 00;08;31;10

Garrett & Paul

Yep, Yep. And I think I think at the highest level when it comes to any of these records, when in doubt, you know, feel free to bring it by the office mail at any melody and you know, we'll take a look and answer any questions. I think one thing, one kind of additional layer that falls on to this is oftentimes there's fraudulent notices.

00;08;31;19 - 00;08;54;02

Garrett & Paul

These particularly come over a text message or an email that says, hey, click to verify your bank account or something. And and obviously, we never want to click on those links. If you're ever navigating to your bank from an email, just type in the bank address directly into the browser instead of clicking link to take you there. But and so if you get those kind of notices in the email, we're more than happy to look at those.

00;08;54;02 - 00;09;29;23

Garrett & Paul

And, and 99% of the time they're fraudulent. But when in doubt, you know, just send them in or bring it by the office and we're happy to review them for you and see if there's anything that happened that we need to do. Yeah, that sounds like good advice to me. I think kind of the other areas that we have to cover are not only specific to our paperwork, but kind of broader, you know, tax and estate and medical records that should be kept by kind of in your experience and your years of wisdom and what are some tax documents that need to be held on to?

00;09;31;05 - 00;21;57;21

Garrett & Paul

What are your tax documents? You know, they're they're going to come in abundance depending on your situation. But trust accounts, you're going to get a 1099. So obviously hang onto those. And, you know, a lot of times you're going to get an amendment.

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