October 25, 2019

In anticipation of a disaster, people generally take precautions and prepare their home accordingly.  But what about their financial affairs? These, too, are susceptible to disasters.  However, with careful planning and foresight, you can protect both your home and your valuable financial information from being lost or destroyed.

It is imperative that you have backups for all of your important paperwork, such as marriage certificates, birth certificates, death certificates, social security cards, passports, drivers license, medical records, credit card numbers, bank account information, deeds, mortgages, car titles, tax returns, insurance policies and contact numbers, wills, power of attorney and contact information for executors, trustees and guardians.  It is also important to maintain a household inventory of valuable items. Photographs of these belongings, recent appraisals and receipts for more expensive items are documents that should all be protected. Compile an itemized list of these items, including a brief description as well as serial numbers, cost, age and manufacturer. 

How can you store this information safely, without the copies, too, being destroyed in a disaster? There are several options for backup storage. A fireproof safe in the home is an option for maintaining the originals, but if the home is completely destroyed, recovering the safe may not be possible. Mailing copies to a relative in a different geographic location may be the best alternative. You could also send copies to a financial adviser in another part of the country.

Another option is e-mailing scanned copies of the documents to yourself, so that you will be able to access them from any location with an Internet connection. Unfortunately, if your email is not secure, you will be exposing yourself to a perfect opportunity for identity theft. A few websites are now offering web-based backup services that can, for a small yearly fee, store your documents safely. Such services will also allow you, or anyone you trust with your account information, to access the information from anywhere. 

The importance of sending copies so far away is because natural disasters typically affect an entire region.  If all your backups and originals are stored in the same area, all will be lost. In this respect, it is also important to have backup plans for your trusted advisors: any executors, trustees, advisors or guardians. If these individuals are all located in your region, they, too, may be affected by the natural disaster. It is a good idea to have these individuals spread out across the country, or to designate backups to act in place of these individuals, in case of a local disaster.