Emergency planning: where to keep your important papers. (Money Management).
Suppose you had five minutes to collect your most important possessions and flee to safety. Would you know where to find your vital personal papers like insurance policies, identification records and proof of home ownership? Are they all in one place or scattered about your home?The September 11th attacks on the World Trade Center and the Pentagon taught us that disaster can strike anywhere at anytime. Such acts of terrorism may be rare, but other catastrophes like fire, flood or earthquake are fairly common and can inflict significant damage on homes, possessions and personal documents.
Fortunately, homes can be rebuilt and possessions reacquired through insurance payouts. But the value of our personal documents is usually underestimated until we need them. As anyone who has experienced a house fire or natural disaster can attest, the aftershock alone is highly traumatic. Losing identification records or the title to your home only compounds the stress and delays recovery. Nobody wants to be given the bureaucratic runaround, especially during times of trouble.
If you haven't designed your emergency strategy, take action immediately. Think through where you will keep those valuable personal documents for easy access so you can concentrate on getting yourself, your children, elderly relatives and pets to safety. Your emergency preparation should also include a review of your insurance, estate and financial planning to ensure maximum protection of assets and investments for you and your loved ones. Here are 10 tips to help you get organized:
1. Gather all your documents, papers and information related to financial matters and personal identification, including:
* Bank account statements, investment records and original share certificates;
* Marriage certificates and/or divorce decrees;
* Identification records (driver's license, passport, social insurance card, health card);
* Trusts, wills, powers of attorney and birth certificates;
* Titles, deeds, registrations for property and vehicles owned;
* Mortgages and other loan information;
* Insurance policies and employer benefit statements;
* Credit card statements;
* Income tax information (copies of past returns, assessment notices and proof of estimated tax payments); and
* Appraisal certificates for valuables like jewellery, antiques and collectors' items.
2. Determine where you are going to keep these documents. A safety deposit box is a logical storage place for many of these items. However, it is more practical to keep some papers, like tax receipts and employee benefit statements, at home. For home storage, consider either a fireproof box or a plastic file case, something which you could easily get hold of if you needed to flee.
If storing your original documents in a safety deposit box, be sure to keep copies in your home filing system (certified in cases of birth certificates and other crucial documents) in case you are injured and require hospitalization or can't access your box immediately.
Some original documents like health cards, drivers' licenses or motor vehicle registrations are usually kept on our person. For these items, either write down the pertinent information on paper or take photocopies of the same and store them in your personal filing system.
3. Place your important original documents in plastic covers. This helps you to readily identify originals as well as protects them and prevents you from accidentally giving them away.
4. In both your safety deposit box and home filing system, keep the contact information of family, friends and employers. You should also record such information for banks and other financial institutions, credit card companies, insurance agents, and phone and utility companies.
5. Apprise family members, trusted neighbours and/or friends where important information is stored, in case you're not around when it is needed. Leave your extra safety deposit box key with a trusted friend, relative, neighbour or lawyer. Do not keep the second key at home.
6. Because you will likely keep adding to your personal filing system, identify a method of tracking new items as they come to mind, perhaps on an index file card.
7. On your computer, keep lists of the contents of your safety deposit box and contact information; however, make a backup copy on a floppy disk (to be kept in your safety deposit box) together with a hard copy printout in both your safety deposit box and home storage system. Storing information on a computer won't be of much use to you if it gets washed away with a flood or if, in the event of a larger crisis, computer systems in your whole community or across the country are shut down.
8. Review your insurance policies to ensure adequate and appropriate coverage. If you have dependents, make sure your life insurance provides for their needs in the event of your accidental death. Also, look at your home insurance and determine whether it is sufficient. "For some people, mass evacuation coverage may be in order, especially if they live m areas that are prone to flood or earthquake," says Stephen Gazdag, an insurance broker with Gazdag, McDowall and Associates in Scarborough, Ontario. "People should address these specific concerns with their insurance broker or agent and make sure they understand what they are buying because many of these types of coverage have to be purchased separately and usually come with a higher deductible."
9. Though it may seem slightly morbid, you should also review your estate planning documents to ensure your assets are protected in the event of your accidental death.
10. Protect your investments. Whether it's a world crisis or one closer to home, there are some precautions you can take to preserve your capital. Make sure your portfolio is well diversified, using the right mix of safety and growth opportunities appropriate to your age, risk tolerance and stage in life. And unless you are at a stage where you will need to draw on your investments soon, try to stay invested for the long term. In the case of a world crisis, the best thing to do is probably nothing, at least in the immediate aftermath. When things are highly uncertain, making rash investment decisions or selling in a panic can result in the very thing you want to avoid: loss of capital.
At the moment, markets are quite volatile. However, you may want to make some minor adjustments to your portfolio -- say, have a slightly higher proportion in cash or fixed income. But unless you anticipate needing the money very soon, it is best to keep focused on your long-term growth strategy by concentrating on high-quality growth stocks or mutual funds. If a crisis forces you to dip into your investment savings, try to avoid withdrawing from your RRSP; otherwise, you can expect a tax bill.
Finally, try to maintain a liquid emergency fund -- either in a cash savings account or money market fund -- from which you can obtain money quickly and easily.
No emergency planning system is completely foolproof or takes into account every single possible scenario. However, within the parameters of what we can control, we should attempt to do so. The little bit of time we spend now to organize our necessary documents may save us hours of grief later. Most of us management types are expert planners and record keepers in our professional lives. When it comes to our personal record keeping, we should employ the same due diligence.
Anne Papmehl, MA (apapmehl@netrover.com) is a former financial advisor, now working as an investment research consultant and freelance writer.
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| Title Annotation: | home and hearth |
|---|---|
| Author: | Papmehl, Anne |
| Publication: | CMA Management |
| Date: | Jun 1, 2002 |
| Words: | 1220 |
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