Should you create documents for your financial activities?
There are some things we do others don’t know about and should be left that way. What about your financial records? There may be a need for someone to know how to access your accounts. Time to think this matter over.
The idea of gathering your key personal and financial documents and information into one place may seem disastrous. Then storing this sensitive data on the internet may send shivers up an down your spine. But not having a remote, off-site backup of your important documents is what should really scare you.
Let’s remind ourselves of the incredible devastation of the World Trade Center. What if your financial information stored on paper was in your office? Imagine the troubles faced by people and businesses that didn’t have adequate remote backups .
Make copies of everything you need to operate your financial life. Send them to someone you trust that is at a distant location.
It’s not just terrorist attacks that can cause widespread destruction, Mother Nature has done a fine job with floods, hurricanes, tornadoes and earthquakes which have displaced people and property. Even more commonplace disasters, such as house fires, can be devastating if you don’t have copies of your documents and data in more than one place.
Being prepared means that you have looked at the worst-case scenarios and prepared for them. Imagine your loved ones trying to file an insurance claim or your taxes without vital documentation. It is only now that the Katrina victims are finding they are once again being victims without such data available.
A solution is to create a file. You can scan copies of important documentation to be stored on the internet or photocopies to be sent to that trusted friend or relative. You will need to include documentation of items needed to rebuild your financial life which includes:
* Birth, death and marriage certificates
* Divorce decrees if applicable
* Adoption papers
* Identification, including driver’s license and passport
* Recent bank and brokerage statements
* House deeds
* Mortgage and home equity notes
* Car title, lease or loan information
* Insurance policies and agent contact numbers
* Credit and debit cards, both front and back
* A household inventory
* Tax returns for the past three years
* The location of wills, trusts and powers of attorney
* Names and contact numbers for executors, trustees and guardians
* A list of your financial advisers and their contact information
* A list of user IDs and passwords for online financial accounts
Put this envelope of documents and computer disks into a larger envelope and mail or overnight the package to the person you’ve entrusted to hold it. Instruct the recipient to leave the inner envelope sealed and to send it back, upon your request, if a disaster should wipe out your originals.
These actions will ensure your financial and personal information is not destroyed should your environment be destroyed. There is someone that can send you documents to reconstruct your financial existence.
The Web can serve as a supplement or replacement for your trusted friend. Scanned documents can be attached to e-mails and stored in your e-mail account or you can use secure online backup services.
The real advantage of files that are stored on the Internet is easy access. You can get to your data from wherever you are in the world and it is a lot simpler to update than physical copies stored with a friend. Remember too that frequent updates are a key to making your emergency files work.
You might, for example, send a physical red file to a friend, a file that you update annually or after a major life change. In the meantime, you could back up your PDA and your personal-finance software every few days online, as well as burn a disk every month or so that you either send to your friend or store off site.
Perhaps you have not been so diligent with your financial scene in the past and have unclaimed money. This could be a utility deposit , a forgotten bank account or a last paycheck never received. Each state is governed by law to hold this unclaimed property until the rightful owner claims it. Do a free search and find out it you are owed money or are the heir to some unclaimed asset from a relative.
