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August 10, 2020

How to Safeguard Essential Documents and Precious Possessions

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The current coronavirus pandemic and recent California wildfires remind us of the uncertainty of life and the need to be prepared for unforeseen predicaments. Take advantage of extra time at home these days to take inventory of where your legal documents and other important records and certificates are being stored and whether changes in your storage and organizational systems are needed. Being prepared for whatever may arise includes organizing and safekeeping all important documents and precious possessions.

Our world has become increasingly digital—with the emergence of new technologies transforming the way we communicate, work, and live our lives. With abundant cloud storage, many important documents can now be stored virtually. In fact, it is easy enough to store the same information on multiple cloud servers that offer immediate access and backups of the data. However, certain valuables and prized memorabilia cannot be stored in that manner. For those items, choose a brick-and-mortar safe deposit box at a secured vault located outside your home or a fireproof safe fastened to the wall or floorboards in your home to keep those possessions safe.

Keep in mind, however, that a safe deposit box may not always be the wisest option. A vault at a bank or other institution may be closed when quick access is needed. The coronavirus pandemic has certainly taught us that there are no guarantees when it comes to what bank branches will be open and what their hours of operation will be. Following Murphy’s law, when you most need to get into your safe deposit box, it’s likely that will be the time when access is limited. Generally, consider storing important items that may be needed more frequently or on shorter notice in a fireproof home safe bolted to the floor or wall rather than in a safe deposit box located at a bank or credit union.

The volume of legal, financial, and personal information in one’s life can be overwhelming. But taking some time now to organize and store your information may help bring some peace of mind. Let’s walk through the best places to store original legal documents, health and medical information, official records, certificates, financial data, personal information, physical items, digital data, and passwords.

Wills, Trusts, Powers of Attorney, Advance Health Care Directives, and Letter of Instructions

If you’ve invested time in estate planning, you’re likely to have important legal documents such as wills, trusts, powers of attorney, advance healthcare directives, and letters of instructions. The originals of your will, revocable trust, and any irrevocable trusts can be stored in a secured safe or safety deposit box. Under the California probate code, any person with a key to the safe deposit box, a death certificate, and proof of identity can access the safe deposit box of a dead person to look for a will or trust. Otherwise, a probate—a legal process that establishes the validity of a will—will need to be initiated to obtain access to the safe deposit box.

It is a good idea to keep copies of these legal documents in an organized file or binder for quick reference. When estate planning documents are updated, be sure to destroy your previous original will. Revocable trusts are generally amended or restated in their entirety and it is wise to keep the originals of the older versions so you have a complete history of the document.

Generally, originals of powers of attorney and advance health care directives should be kept in a secured safe that is more readily accessible than a will or trust since you’re likely to need access to these documents more frequently—and possibly in emergency situations. Ease of access is crucial. Again, it is a good idea to keep several copies of these legal documents on hand since medical providers may request to review them and they typically only need to see a copy.

A letter of instructions is an informal document containing important financial and personal information for your survivors, successor trustee, or guardian and it should be updated as life circumstances change. It is beneficial to keep these instructions alongside copies of your will and trust in an organized private file or binder so you can review and update as necessary. To avoid confusion (for you and your survivors), you should destroy old instructions as you update them.

Birth, Marriage, Divorce, and Death Certificates

Birth, marriage, divorce, and death certificates are needed to prove entitlements to benefits or other matters. It is smart to have one or more certified copies of these documents on hand. Keeping these documents in a home safe helps guarantee the documents do not fall into the wrong hands. If the documents are misplaced or lost, additional certified copies can be ordered from the appropriate county recorder’s office either directly or through a fee-based service.

Original Social Security Cards

Original social security cards should also be kept at home in a safe to prevent the card from being misplaced or stolen. If the card is lost, access your online Social Security account to apply for a replacement card. Since you don’t need the original card very often, you could also store the card in a safe deposit box.

Passports

It is recommended that you store your passport in a locked cabinet. Since a passport can be needed on short notice, home storage is often more preferable than a safe deposit box. Uploading a digital copy to a password-protected cloud server that can be accessed from a cell phone can save time and aggravation when looking for specific information shown on the passport such as your passport number, date of issuance, or expiration date.

Property Deeds and Car Titles

Property deeds and car titles should also be stored in a safe place. Original deeds to property are rarely ever needed to complete a transaction but it is advisable to keep the originals. The ownership certificate for an automobile is needed to transfer title to a new owner so keeping the original in a safe or safety deposit box works best. If the title is lost, you can obtain a duplicate title certificate through the DMV.

Current Insurance Policies

Being adequately insured is part of modern life. Your life, your well-being, your home, and your stuff often requires protection. Much of this information can be kept in organized files where it can be accessed by yourself or others who might need the information. Since many policies are updated and renewed annually, this type of data can generally be stored in the cloud or kept in organized paper files where it can be easily accessed when needed. One exception to this rule is an original copy of a life insurance policy, which may need to be surrendered to the insurance company when submitting a claim. The original policy should be kept in a safe or safety deposit box.

Stock and Bond Certificates

Over time most companies have stopped issuing paper certificates for stocks and bonds. Clipping bond coupons is also a thing of the past. If you find yourself with any paper stock or bond certificates, it is generally recommended you give the certificates to a broker who will put the certificates in “street name”—essentially an electronic record showing ownership of a stock or bond. You will no longer have to worry about how to keep the certificates in a safe place. Plus, selling shares electronically involves a much simpler process.

Other Financial Documents

For most people, the days of receiving monthly account statements for bank and brokerage accounts are over. Most financial information is now provided as password-protected attachments to emails or accessed via secure online servers. Keep a list (i.e., personal information guide or letter of instructions) of bank and investment accounts and contacts at financial institutions and wealth management firms so it is easy for someone to determine what accounts you maintain and with what institutions.

Doctors’ Prescriptions

Keeping an up-to-date record of medicines and prescriptions you are taking can be a lifesaving technique. If you are incapacitated in any way, a record can help you or a family member remember what medicines you are taking and help doctors and nurses evaluate compatibility of new prescriptions with current medications. A simple Word document or an online PDF form can help you keep track of this information. Consider saving a copy in your organized paper files and in cloud storage that is accessible from your phone or computer. This information and/or the location of the information should be shared with a family member or friend.

Home Insurance Inventory

Homeowner’s insurance provides coverage for the contents of your home up to the limit selected with your insurance company. In the event of a covered loss, the insurance company may need a list of the personal property that was stolen or damaged, along with the estimated value of the items. The easiest way to keep a good inventory of your belongings is to take a video of each room in the house and then store the video in a fireproof safe or in the cloud. In situations of total loss, such as in the recent wildfires in California, many insurance companies paid policy limits in full without requiring homeowners to itemize losses. But it’s best practice to keep a good record of your personal property.

Cash

More and more the world is evolving into a cashless society. But for peace of mind, some individuals like to keep a significant amount of cash on hand. Typically, the best place to store physical money is in a fireproof safe attached to the wall or foundation so it cannot be easily removed from the home. Additionally, money should be stored in places not prone to fire or flood, or where it might be easily discovered by people coming and going from your home. While hiding money in places like a shirt pocket or behind a wall decoration may work, remembering where you hid the stash sometimes may be a problem.

Jewelry and Small Heirlooms

Jewelry items that are worn frequently are best kept in a home safe. That way you’ll always have access to them. If you store these items in a safe deposit box, you may find that the bank will not be open for retrieval when the occasion for wear arises. Other small heirlooms or jewelry of value that will not be used or worn can be kept in a safe deposit box.

Spare Keys

In many instances, entry to locked places has become a keyless process. Many cars, houses, storage boxes, and safes can be opened with a keypad or a phone app. But for entry where a key is required, it is always best to keep one or more spares. Spares can be kept with a friend, in a box in your car, in your wallet, or in a safe or lock box. It is generally a good idea to label keys since many keys look alike.

Family Photos

Family photo albums filled with prints taken before the digital age when film was the only option are precious. Digitizing them with a scanner is time-consuming but is a good way to make sure these memories will be there in the future, even if the photo albums are lost or destroyed. There are numerous free online storage servers for photos or fee-based sites where your photos can be scanned, organized and saved. The key for ensuring these photos will be available for future generations is to make sure that your loved ones know where your photos are stored and how to access the photos if you are not available.

Passwords

Passwords can be maintained via an online password manager (e.g., LastPass, Keeper, Dashlane), in an Excel spreadsheet, or in a Word document. If an online storage site is used, be sure to include the master password in your letter of instructions, which should be stored in a secure place. If an Excel spreadsheet or Word document is used, the document can be stored online with a password. Given the frequency with which passwords change and new ones are added, try to determine a logical system that avoids confusion and is easy to use.

Organizing, Locating, and Sharing of Information

More than ever, it feels important to be connected to our families and trusted advisors and find ways for others to have access to critical information if and when the need arises.  Whether one uses (1) an online digital vault dedicated to organizing and storing legal documents and personal and financial information, (2) PDFs or hard copies of personal information guides, or (3) Excel spreadsheets or Word documents, it is important to find an organizational platform that works for you (and one that can be easily updated). Knowing where to keep originals and copies of important documents and possessions is key to the process.

If you are interested in discussing the ways to best store and access your legal documents and possessions, please contact a member of your B|O|S wealth management team.

Filed under: Financial Planning

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