Essential Legal and Financial Documents to Have

My Comments: This article appeared as An emergency checklist for advisors and clients: essential legal and financial documents. It caught my eye since lists are always useful when it comes to writing a blog post that someone might read. After all, I read this one.

More than that, however, is the fact that getting older is a difficult process. It’s easy to be in denial and pretend our days are not increasingly numbered. And having clients who adamantly refuse to plan properly is a pain in the backside, especially for those family members left behind to figure out the mess.

So I encourage you to read this. If you need help, call me or call your attorney. If you need help finding someone who will focus on you, and you alone, I can give you some names.

by Ike Devji, JD on July 24, 2014

Finding key documents can be trying and laborious under the best circumstances, even with plenty of notice, like at tax time every year. Finding them under stress — or worse, having to have someone else sort through the entirety of the paperwork you have hoarded after an emergency, death or other crisis — is often impossible. This is the list of the most essential legal and financial paperwork that you should be able to lay hands on or instruct others to easily find.

Passports: Make sure they are current and useable. If your kid is off on a summer abroad and gets hurt, it will certainly be the wrong time to discover that your passport is expired (true story) and that you have to wait for the government to reopen and for your passport to be processed.

Copies of other identification:
Driver’s license, Social Security card or other legal forms of ID, including birth certificates, are often required to obtain other documents.

Insurance policies: Life, property, liability and health are four most basic key areas. I’d hate to go on what Allstate (or any carrier) felt like paying me on my homeowner’s policy on good faith alone if my home was damaged or lost in a flood or hurricane. Having a copy of these actual policies is key in demanding service, coverage, and in enforcing the actual contract if required. Similarly, health insurance cards are often kept in places that can be lost or stolen, like wallets and purses — if you’ve ever sat in an emergency room and seen who gets treated first and how well, you’ll get this.

Essential corporate and business documents, including bank statements: If you have corporate documents that control chain of command, ownership, title, account balances and succession, you better know where they are. I am continually amazed at how many doctors don’t have copies of their corporate documents, adding stress, delay and expense when those documents are needed, as in a lawsuit between partners in a medical practice. In that case, you may be stuck with copies that may or may not be accurate.

Mortgages and deeds: These are perhaps the most overlooked, lost and disrespected documents we come across — odd, since it is the single largest asset of many doctors.

Medical records and prescriptions:
This is the most subjective, but if you or a family member have a complex medical history or require prescription drugs to function at a basic level, having copies of the prescriptions at issue is essential, especially during emergencies.

Estate plan: We assume you have one, whether a basic will or a more sophisticated series of trust of various types and that you’ve updated it and you have avoided common mistakes. It does no good if we can’t find it and don’t know who’s in charge.

How and where should they be stored?

The conventional wisdom, and likely the safest bet, is that these documents should be stored at the bank in a safety deposit box. That said, it may be impractical or subject you to delays based on their hours and a variety of other conditions including the substantial limits on access by third-party agents you may want to have possession. Would the person you send be able to get into the box, including your own children?

Home and office storage

Invest in a safe that is both waterproof and fire-rated to withstand most common house fires. “Too big” or “too expensive” is not a valid excuse for almost anyone reading this. Costco, as one example, has large fire-rated safes that will hold guns, laptops, jewelry and documents for as little as $600, and small, entry-level safes are a fraction of that cost.

Consider which documents are sufficient if you have a copy, like an insurance policy, and which require originals, like a passport. Consider keeping the original paperwork for which copies are an acceptable substitute in the bank and the reproduced copies at home. The most prepared also have copies of documents they actually keep on hand at home (like passports) saved somewhere else, as most of us don’t have those details recorded or memorized. Do you know your passport number by heart?

All my personal clients from this month forward will receive electronic copies of their documents, instructions, filings and signature pages on an encrypted “key drive” to help in this process. That drive also allows other documents to be added to it and is encrypted to a high security level. Don’t make electronic copies the primary source; it limits you to times when you have power and computer/internet access, a significant variable for folks in a natural disaster, as one example.