You may event want to think about becoming a paperless office, or at least as paperless as you legitimately can. If your current strategy simply involves boxing files up and ignoring them, then hopefully the following pointers might help you get on top of the paper mountain.
Electronically held information
Don’t forget that that e-mails, databases, word processed documents and spreadsheets also count as documents, and just as with paper items, you are responsible for ensuring that they don’t get lost or damaged, or worse still hacked and stolen. If you haven’t already, please create and implement a Data Protection Policy, a Client Confidentiality Policy, and perhaps most importantly in this day and age where cyber theft is on the increase – an Information Security Policy.
Wills and Probate
You can find the Law Society’s Practice Note on retaining Wills and Probate files here.
Original Wills and Lasting Powers of Attorney should be stored until after the death of a client, or until the original has been returned to them, even if you know that that a later Will has been made. Even when you do know or suspect that a client has made a new Will, it’s a good idea to keep copies of supporting documents where the originals have been sent back. For this reason, you may want to scan key documents and keep them separately. Don’t destroy original Wills until all risk of a claim has passed as the standard 6 year retention period may not protect you in such a situation. This is where your ‘Do not Destroy’ stickers come in handy.
If you’re unable to contact the client, be sure to document all efforts to trace them before destroying any supporting documentation. Use 85 years as the date of death if it is unknown and you’re responsible for storing personal information for the life of a relevant individual.
Trusts
The Practice Note can be found here.
You are entitled to charge for storage, but many firms will store important documents such as the original Trust Deed, supplemental Deeds, and the original letter or memorandum of wishes, indefinitely and free of charge. Similarly with paperwork such as Trustee Investment Policy documents, Annual Trust Accounts, and Tax Records. Any papers that you don’t intend to retain must be returned to the client, and if a file is destroyed detailed notes must be kept so that the absence of papers can be properly explained if necessary.
ID documents
If your Anti-Money Laundering policy and identity verification procedures have been applied to all clients (and I recommend that they are), evidence of identity and details of the transaction should be kept for at least 5 years from the end of the transaction or business relationship. After that, your MLRO (Money Laundering Reporting Officer) should decide whether or not to destroy them.
Tax and VAT documents
As HMRC can investigate up to 12 years after an assessment, trustees should retain all tax papers for at least this long after the end of a Trust period. Records and papers relevant to VAT liability should be kept for at least 6 years.
Employee data
Employee documentation should be destroyed 6 years after an employee has left the firm, or their employment was terminated. All documents relating to an unsuccessful candidate should be kept for 12 months after they were rejected, and then destroyed. Employee PAYE (pas as you earn) records should be retained for 3 years from the end of the related tax year.
File storage procedures
- Archive closed files at least weekly, and never place archive materials in the internal mail – ensure that they are collected and delivered by hand. If a document is being sent to a third party, use recorded delivery, tracked DX, and if delivered by hand externally – have the recipient sign to confirm receipt.
- Store Will and Trust files with a review rather than destruction date, and scan and store key documents electronically.
- Always tell the client how long a file will be archived for before being destroyed. You may even want to tell them how often the file will be reviewed.
- Consider using the archives to store files which aren’t yet closed but which aren’t regularly required. Clear desks encourage productivity. Apparently.
- Use brightly coloured Do Not Destroy labels and pre-printed stickers for Deeds and Wills. They may be basic, but technology can go wrong and if there’s a written warning on the file, someone is less likely to destroy something that a computer has said should be destroyed, without first asking questions.
And finally – always, always write the unique reference number for the file on the front. You don’t want to get on the wrong side of your Records Manager. Show them the love that they deserve, and your urgent requests for a file will never be denied.