Coping with a disaster like a fire, flood or earthquake is traumatic on many fronts, and the recovery can be lengthy and obviously very stressful. Your financial resources and the ability to utilize them on a short string may become more important than ever before as you build back your family’s way of life; and if there is an injury or even the loss of a loved one your financial documents will take on a new dimension of importance.
Delays in locating, or the inability to locate, some of your key financial documents can throw major roadblocks along an already difficult path and add to the stress, tension and length of the recovery period.
There are some documents you will need right away after a disaster or tragedy strikes, and others that you may not need right away but will be very difficult to replace if they are lost or destroyed. Also, there are some documents where you MUST have the original, and others where you just need the information contained and a copy will suffice.
What are the key documents to protect & why are they important?
The key documents for each family depends on their particular situation, but here are a few that affect most people:
Identification records: This includes your driver’s license, birth certificate, marriage certificate, passport, Social Security and Health Insurance and/or Medicare Cards. After a disaster, you may have to establish your identity with financial institutions if you have to get new credit cards, put through a change of address, apply for government assistance programs or loans, or take other actions. This becomes even more dramatic where the loss of a loved one is involved since you will have to deal with paperwork to have an orderly transition of financial affairs.
Inventory of Your Possessions (and appraisals of your valuable items). If your property is destroyed, you will need to be able to establish what you’ve lost for insurance claim purposes. With nearly everyone having a phone with a camera, it’s easier than ever to put together a photo inventory of what you have.
Insurance Policies. You will want to have access to your policies to see what is covered after a disaster, along with the policy numbers and contact information so that you can start the claim process. Just having your insurance broker’s phone number probably isn’t enough, since your local broker may be unreachable if there is a disaster in your area. Also, you may have various sources of insurance – remember, in addition to auto and home insurance you may also have life insurance, health and disability insurance, and long-term care insurance. Some policies may have been purchased years earlier, and not from your current broker. If you have life insurance with cash value, this may be a source of emergency funds.
Recent Statements for Banking, Investment and Retirement Accounts. When you think about the need to marshal resources to start rebuilding after a disaster, imagine the added complication if it’s next to impossible to sort out what you have and can’t locate the account numbers and contact information you would need to access your financial resources.
Car Titles and Registrations. If your vehicle is damaged or destroyed, the need to produce these documents quickly may take on great significance. For example, the insurance company may declare your car to be a total loss and they may take over the title to what is left of the car as part of the claim paying settlement. Long after a disaster, if you want to sell your car but the title has been destroyed or lost, this can really slow you down.
Property Deeds and Mortgage Papers, or Lease Documents. If you own your home and want to sell it, you will need the paperwork that goes with ownership, and it can take some effort to replace these papers if you can’t locate them. Lease and mortgage papers may also become important as you take steps to preserve your rights and understand your obligations after a disaster. Don’t forget about papers documenting any home improvements you may have made. When you sell a house, you may need to show that you have all the required permits in order to close, and home improvements may add to your tax basis when you calculate any gain on the sale.
Military Records. If a family member is entitled to Veterans benefits, military discharge papers can become especially important.
Will and Trust Documents, and Power of Attorney if Applicable. If a disaster results in loss of a loved one, you will need these documents to settle their financial affairs and arrange for an orderly transition of assets. If a loved one is incapacitated and they have provided a Power of Attorney, you will need to be able to produce it in order to manage their financial affairs. If you are relatively fortunate and the disaster only results in property loss, it can still be a major headache to reconstruct these papers later and the time when you will need them can come upon you without much warning.
Credit Card and Other Loan Records, and Utilities. As an example, suppose you are unable to receive mail due to a disaster. You will need to be able to contact your credit card companies and make arrangements to pay your bills.
Safe Deposit Box Information. This includes the location, box number and of course the key. If you keep originals of important documents in a safe deposit box you may need to access it soon after a disaster. Remember to keep an inventory of the contents.
Tax Returns. It’s a good idea to keep copies for at least the past three years readily available in case you get audited. Also, when it comes time to prepare your taxes for the next year, you will want to refer to your prior year tax return.
Other Items: Health Care Proxy, Living Will, Medical and Prescription records; contact list for family members, doctors, dentists, lawyer, accountant, insurance broker, and other key resources. Divorce and child custody papers, adoption papers, stock and bond certificates.
Where should families store their important documents?
Some items should be kept in a safe deposit box or a home safe that is capable of withstanding fire and water damage. Examples of Safe Deposit documents are those where originals may be needed and can be difficult to replace- birth, death and marriage certificates, passports, social security cards, property deeds, car titles.
If you use a safe deposit box, consider a bank that is not in the immediate area of your house since a disaster can impact the entire area. If you use a fireproof safe, consider keeping it in the basement since a fire can cause it to fall through from an upper floor. Don’t keep the original of a will in a Safe Deposit box – some people leave the original with their lawyer. The problem is that a SD Box may be sealed by the bank after death occurs.
Keep copies of important documents off-site, somewhere other than your home. A close relative’s home may be an option, preferably not in the immediate area. Your office may be an option if it is well secured, but keep in mind that some of these documents contain sensitive personal information – and you don’t want to leave these items behind if you leave your job.
Password protected Online “Cloud” storage may be a good option for copies of important documents. To get document copies into the cloud, you can scan them or even use your phone. Be sure to use a trusted, secure provider.
Keep records of your account numbers and passwords in a secure place that you can access in the event of a disaster.
Once or twice a year, go through your safe and disaster supplies kit to make sure your records are up to date. Be sure to update your records after making major purchases or completing major remodeling projects.