Nobody likes to think about disasters – let alone plan for them – but, it is very important that we implement a strategy for keeping certain information safe. I’d like to discuss the important documents that will always be needed by clients regardless of the specific form of destruction or devastation that you encounter.
• Identification: Most of us have probably never been in a situation where we literally have no identification to prove who we are when prompted to do so. Many people in the tornado-destroyed areas had no driver’s license, Social Security card, birth certificate or marriage license. The lack of said documents could make life very difficult when trying to revive your life after a complete devastation and get back to normal as you know it. Remember: identification is the driving force behind everything we do in our day-to-day affairs.
• Documentation of Ownership: Deeds and/or titles to land, homes, cars, boats, etc., are all documents especially needed when forced to prove that you owned your home or car for insurance claim purposes. In my opinion, it would be very difficult to file insurance claims on property that has been completely blown or washed away with no evidence of the damage available for assessment. Therefore, the need for documented ownership may be at issue at some point in the claims process if the asset is no longer present.
• Personalized Legal Documents: I cannot begin to comprehend the emotional and total lifestyle devastation that a tornado, flood or hurricane would have on a person’s life, much less the additional effects from a family member being killed in the process. Sadly, then, the question becomes “Do the surviving members of the family have a copy of the deceased’s will?” Did the deceased member even have a will? What if a family member is seriously injured and incapacitated? Does the family have a copy of the Power of Attorney, the Living Will and/or Medical Proxy? Obviously, it’s extremely important to have these documents in the first place, and then for family members and other key advisors to have copies of these personalized legal documents should tragedy strike.
• Proof of Insurance Coverage: Whether it’s homeowner’s, auto, health, life, disability, long-term care or an annuity insurance contract, all insurance coverage policies and/or supporting documents are of immense importance in post-disaster situations. Reviewing homeowner’s insurance coverage is something of yearly importance that I highly recommend you relay to your clients, as new personal property assets or even structural additions often happen. Having full knowledge of their coverage and the supporting documentation will always help expedite the claims process, especially in a time of devastation, while also assuring they get the full benefits of their insurance coverage.
• Tax Returns and Financial Account History: Most often in disaster-stricken areas, there are tax relief efforts announced and enacted by state and federal governments for the citizens of the affected areas. That relief, in some cases, allows for carry-back deductions with regard to casualty losses, resulting in the need for historical tax return retrieval. Taxpayers are only allowed to amend back three years; however, I highly recommend keeping from five to seven years of documented, filed tax returns, due to statute-of-limitation issues. Whether tax relief deductions are allowed to be carried back or not, there is still the need for past tax return retention should a historical audit be requested by the IRS. This also could bring forth the need for all financial account histories such as bank accounts, credit card accounts, and even investment account statements, as taxes and finances collectively intermingle.
Business disaster planning in the wake of 9-11 has improved dramatically; however, the need for personalized disaster planning within our own families has been somewhat overlooked in the whole process. It’s unfortunate that it often takes a natural disaster to force us to open our eyes and realize not only do our clients need financial advice but they also need help preparing for when disaster strikes.
This column is provided by Robert Gregov,CFA, CFP®, a local member of FPA and President of Roche Financial Partners. Roche Financial Partners is an independent wealth management firm that specializes in comprehensive financial planning and investment management. Our mission is to make a significant contribution to the quality of life of our clients by empowering them with the peace of mind and personal satisfaction that comes from achieving their financial goals. To learn more about Roche Financial Partners or the article above, please contact us at (609) 575-6762 or firstname.lastname@example.org. See our website at www.rochepartners.com.