Get Your Financial Planning Docs in Order

When it comes to spring cleaning, the last thing you probably want to do right after tax season is organize your home office. But really this can be the best time to get your financial documents in order because they are likely close at hand.

Sometimes the question comes down to where to start. I would begin by gathering the most essential documents your wealth manager, and your family someday, would need to manage your financial affairs.

5 essential financial documents

It’s natural to put off organizing any important documents in your life because, well, it feels like adult homework. The exercise of thinking about where these documents are (or at least should be) can be stress-inducing and reason enough to put it off. But as with anything in life, it’s all about perspective.

Having the most important papers in one place comes in handy if you want to hire a new wealth manager, make changes to your financial plan, get a loan or update your estate documents. Doing the hard work now will save you time and stress later.

Here are the primary documents you should have at the ready for an early meeting with a financial professional:

1. Last two years of tax returns
2. Most recent account statements (checking, savings, brokerage, mortgage or loans)
3. Up-to-date insurance declarations (home, auto, life)
4. All employment benefit documents
5. Estate planning and legal documents (wills, powers of attorney, advanced health-care directives, divorce settlements, prenuptial agreements, trusts, etc.)

If you don’t have current copies, take this opportunity to update your records. You typically can find most of this information online with your bank, broker-dealer, insurance company or employer.

Once you have copies of all these documents, stop, take a minute to open your favorite bottle of whatever it is you enjoy, and toast to your achievement. This has been an extraordinary effort already.

Ok, now that you’re done congratulating yourself, back to work.

Get digital

If you’re of that rare breed who has already stored these documents in a singular place, a fireproof safe let’s say, but you don’t have soft copies, then consider creating electronic versions.

It used to be that you had to travel to your local print-and-ship store to copy, scan or manipulate your professional documents. Today, you can use a home scanner or download one of several, cheap or free document scanning apps on your smartphone. Choose the method that’s easiest for you.

After scanning your documents, save them to a central drive. Most cloud services will allow you to store a set number of documents for free. If you’re at the point where you need to pay for storage, do it. This is the modern version of the fireproof safe, and once you full-heartedly adopt this technology, you’ll reap the benefits. Just be sure to create secure passwords and access the information via safe, secure networks.

Now that all these documents are in a central place, you can easily provide them to your professional advisors: wealth manager, estate planning attorney, accountant, etc. In addition, should your partner, family member, doctor or lawyer need to access them in the event of your incapacity, they are readily available, saving time and effort.

Share with family

Naturally, you’ll want to share your accomplishment. This is the perfect time to ensure that the VIPs in your life know the location of important documents. Having these discussions ahead of an unforeseen event is an act of love that will really make difficult times a little easier. Be sure to provide your most trusted family members with your log-in information for essential accounts, as well as the names and phone numbers of professional advisors.

“My husband and I make time each year after tax season to review our latest balance sheet, shred old financial documents, and ensure we each have online access to our financial accounts,” shares my colleague Mary Ellen Krueger, director in wealth management and a partner at Aspiriant.

Making this spring cleaning and organizing activity an annual practice will help to remind you to have these important conversations in case anything has changed or needs to be updated.

Don’t agonize, organize

With all your documents collected and centrally stored, you can approach a meeting with your financial planner or another professional service provider confidently. You’ll be able to easily provide them with the information necessary to give you the best advice. And you and your loved ones will have peace of mind knowing your financial documents are organized and readily available.

As I mentioned at the start, it’s all about perspective. The half Saturday it takes to get organized will be well worth the investment of your time, ultimately saving you time and frustration later. Tie this exercise to a more immediate, tangible reward — perhaps a fancy dinner out, a nice night in or a refreshing spring walk, whatever’s your speed — to celebrate the accomplishment of being organized and prepared.