While mankind may wrought great deeds from great risk (my apologies to Herodotus for the misquote), your important papers – insurance policies, loan papers, marriage and divorce documents, estate plans, medical records, etc. – would much prefer to be do-nothing homebodies, content to be kept closeted away from disaster, thieves, hackers, or just plain misplacement.
So, for those of us not fortunate enough to have an ACME Home Vault in our homes, here are 5 ways to store all those documents our lawyers, financial advisors, insurance agents, accountants, and other professionals tell us to keep in a safe place.
1: A Locking File Cabinet
The lowly locking file cabinet – available at most office supply stores, superstores, junk shops, antique shops, furniture stores and garage sales – is an affordable storage option for those documents you need to refer to regularly. Unfortunately, the file cabinet is somewhat less than disaster-proof being neither water or fireproof and generally accessible to a determined thief armed with a large screwdriver.
2 : External Hard Drives & USB Sticks
Scanning and storing documents electronically dramatically cuts down on the amount of paper one has to keep track of while still providing convenient access to the documents. If you are going to store important legal documents in either of these devices, it is important to remember two things: (a) use a “ruggedized” device that provides hardware encryption and (b) remember that for some documents – like birth certificates, Wills, titles, etc – only the original (or certified copy) will do; electronic copies of these documents are not accepted by the powers that be. And, for those that are not familiar with the terms “ruggedized” and “hardware encryption” – “ruggedized” means that the device has been designed to withstand being dropped, exposed to fire, or submersed in water (to some degree) and “hardware encryption” means that the device will encrypt/decrypt your data by itself without you having to install or use any additional applications. So, in the event the device is stolen, having everything on the device encrypted insures your documents will remain secure. Given the portable and flexible nature of these devices, it is possible for them to be misplaced, re-purposed, or lost; if you chose this option for your storage needs, be sure to maintain complete backup copies of the entire device.
3: Cloud Storage
The digital world’s answer to the safe deposit box, cloud (or web-based) storage means sending your scanned documents via the web to be stored on remote disks owned and operated by a service provider. It’s like having an external hard drive that can be accessed 24/7 anywhere an internet connection is available. When choosing a cloud storage service, make sure that the provider’s corporate headquarters and storage systems are located within the US (you want them to be subject to US privacy and data security laws) and that the provider will encrypt (during transmission and when stored), backup, and protect your data. Again, remember that electronic copies of certain documents will not be acceptable substitutes for the originals, so if you go this route, you will still need to plan to store and secure those originals.
4: A Fireproof/Waterproof Lock-box or Safe
Home safes come in all sizes and degrees of protection from lock-boxes the size of a lunch box to safes the size of small refrigerators. Regardless of the size, the average home safe is intended to be put somewhere out-of-sight and bolted into place. The downside to this storage solution is that cost is directly proportional to the amount of space and the amount of protection offered by the safe. On the other hand, because you can share the location of and combination to a home safe with trusted family members your documents can be accessed by others should you become incapacitated.
5: A Safe Deposit Box
If you are looking for the closest thing there is to a disaster-proof/theft proof storage system, the safe deposit box will be you go to option. Available for rent at most bank branches, safe deposit boxes provide secure storage for those documents that would be difficult to replace. The tight security surrounding safe deposit boxes comes with a few side-effects. Since you can only access a box during the bank’s regular business hours, safe deposit boxes are not the best places to store documents, like powers of attorney, that you may need at a moment’s notice. And, because banks restrict access to a box to the person(s) renting the box, it can be difficult if not impossible for family members to retrieve items from your box in an emergency even if you give them the key.
No matter where you store your documents, be sure to tell someone (your spouse, a trusted family member, a trusted advisor) where your documents can be found and how to access them should something happen to you.Tagged with: divorce • finances • Money and Finances