Going through a parent's paperwork

A file cabinet and a closet shelf of boxes is what stops people. It looks like a ten-hour job and most of it turns out to be junk mail. The part that matters is small: a handful of documents that are hard to replace and a few that affect money.

Do not shred anything on the first pass

Pull it all out, keep the original order, and sort into three piles: legal and financial, personal, and obvious trash. Do not stop to read. The letters and photos will eat the whole day if you let them.

Keeping the order matters because context lives in the folder, not on the paper. A lone statement means nothing. A folder with an account name written on it tells you what you are holding.

The documents worth slowing down for

• Will, trust, power of attorney, and any deed or title.
• Birth, marriage and death certificates, military discharge papers, naturalization papers.
• Insurance policies, pension and annuity paperwork, Social Security letters.
• Statements showing account values around a date of death, which affect taxes on inherited money.
• Mortgage and loan payoff letters, and anything showing a lien on the house.
• Tax returns, kept for as long as your preparer tells you to keep them.

The cost basis problem

When investments or a house pass to heirs, somebody will eventually need to know what they were worth on the date of death. That number is often printed on a quarterly statement that looks like junk. Set aside anything from around that date, even duplicates.

This is the mistake people make. They shred a whole year of statements because the accounts were closed, and the one page that mattered goes with them. When in doubt, keep the year and ask an accountant.

What to shred, and how

Anything with a Social Security number, an account number, a medical detail or a signature goes through a cross-cut shredder. A strip shredder is close to useless. If you have boxes, a paid shredding service or a bank's shred day is faster.

Soaking paper in water does not destroy it. It dries, and it is still readable.

Personal paper gets its own box

Letters, journals, church bulletins, report cards and photos go into a box labeled with a name. Nobody makes good decisions about a parent's letters while standing in a hot garage.

Pull out anything a living person would not want passed around, and decide about that privately, later, with the door shut.

Then close the accounts

Mail is the leak. Forward it, then call the bank, the insurer, the utilities and the phone company and ask each one to switch to paperless or to a new address. Otherwise the same paperwork arrives again next month.

Keep one sheet listing what was closed and when. It saves an argument with a call center six months from now.

The thing people get wrong is tossing the whole cabinet because it is mostly old statements. Deeds, savings bonds and the will turn up in the middle of that stack, and they do not come back. Open every folder before anything goes to the shredder.