Safely Store Important Financial and Legacy Information

It is crucial to get important estate and financial planning documents done, but it is just as important to store those documents in a safe place that your survivors can easily access. Estate planning documents like your will, living wills, powers of attorney, trusts, medical directives, and financial information are needed during the biggest emergencies, and they also need to be kept safe in the meantime. Additionally, you need to securely store information about birth certificates, marriage licenses, even divorce decrees, as well as medical records and property titles.  Take the time now to list out your most important documents, including recurring bills, digital assets, computer and social media passwords, online memberships, and smartphone passwords, and keep these accessible for your survivors.

Paper or Virtual Doc Storage?

Many people are attempting to become as paperless as possible and choose to store important data onto memory sticks or an external hard drive. Others are opting to go even more virtual and choose to use online data storage services that keep this information in the cloud. Then there are the individuals who prefer to put pen to paper and choose to organize this information themselves and store it in a safe deposit box in their homes.

There is no perfect answer, but how you choose to store your relevant data will be reflective of your risk tolerance and time invested. Storing all your documents yourself in your home is labor-intensive and time you must be willing to invest in creating and maintaining your information system. Going paperless is generally the most convenient, safe, and quickest. But there are pros and cons to storing your information in the cloud versus on a disk drive.

But the online option can make it harder for a trusted person to figure out what bills need to be paid, what services need to be closed, who to contact for final arrangements, etc. LA Times finance columnist Liz Weston quotes a friend regarding organizing your data, “Your frequent flier miles could disappear while your Netflix subscription continues indefinitely.” Whatever method you choose to store your most valuable estate and financial information, make sure it’s organized for the person who will need to use it.

Your list also depends on the complexity of your circumstances and the age when you die. An individual who dies in their thirties probably has more moving parts and information reflecting their daily life than someone in their eighties who has likely been downsizing in their life. The changes in our circumstances over time further illustrate the importance of updating your information regularly and whenever major life changes occur.

How to Safely Store and Share Your Digital Information

When you sit down to get all your documents organized, you will need to create digital copies of important documents like social security cards, birth certificates, passports, marriage, and driver’s licenses. Scanning these documents does not make them a legal copy, however. Every document is different but is worth the effort to copy in case they get stolen or lost down the road. It also puts the information in an easily accessible digital format while the original documents can stay in a fireproof safe or a bank deposit box. For a list of hard copy documents and how long you might keep them, look here.

If you are not comfortable using digital devices, ask someone in your family who can help you set up your digital file system and show you the basics. Alternatively, allow your trusted loved one to store some information on your behalf.

There are many online storage possibilities, but the most popular options are Microsoft OneDrive, Google Drive, and Apple iCloud. These services offer free limited storage in the cloud, and you can purchase an upgrade for additional storage capacity.

If you prefer storing documents locally on a physical storage device, you should include a backup plan and run it regularly to keep your information up to date and make sure the device still works. A Windows 10 computer permits scheduling backups automatically using Windows File History. Simply type <backup> in the search bar and select <Backup Options> from the results. If you use a Mac, there is also an auto-backup feature. Read about Apple’s Time Machine to back up your files here, which also explains other methods to employ when backing up and restoring files.

You can also purchase an external USB hard drive for file backups. Look for a 1 or 2 TB drive that can house all of your information and updates quickly. Smaller USB memory sticks also work but are typically limited to 256GB of information. USB memory sticks are easy to transport if you travel and want to keep your information at hand. These backup methods should have an extra drive to store identical information in a fireproof safe or a bank deposit box.

The truth about safely storing your financial and other valuable personal data is that the best method is often a combination of these methods and tools. For your loved one to access financial records, they need your personal information such as usernames, passwords, and social security numbers. Make that information available to them and easily organized so your loved ones know what to do in case of emergency.

If you feel unsure about your ability to organize and safely store this critical data cohesively, talk with an accountant, estate planning attorney, or other trusted advisor to create a structure to implement before copying and scanning data. Do your research first, and then implement your strategy for best results. If you need to update your estate planning documents, give us a call at 702-731-2333 to talk to an estate planning attorney today.

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