Many people in LA faced a terrible choice: they had just minutes to decide which items to grab before evacuating their homes. Once their house disappeared in the rearview mirror, there was a significant risk that they might never see it again.
Which stuffed animal should you bring? Which items would fit in the trunk, and which would go up in smoke? Which papers? Oh, wait–where are those damn papers?
I can’t tell you which stuffed animal to bring, but I do have some suggestions for organizing your legal and financial documents.
People in LA aren’t the only ones who have recently realized the benefits of being organized. Recent days have included unprecedented breaches of decades-long norms of government, like a non-partisan civil service dedicated to fair and systematic implementation of laws and government programs.
Even as an optimist, I must acknowledge that the risk of a failure of U.S. democracy is higher now than at any point in my lifetime—likely by orders of magnitude. I try to be humble in my predictions, but I don’t know what will happen. Whether you fear the devastation of natural disasters or the danger of a cruel, unchecked government, it’s wise to have your affairs in order.
Which papers are essential to keep track of?
Which papers you need will depend on your situation. Still, things like photo IDs, passports, social security cards, birth certificates, marriage certificates, wills, trust documents, and other estate documents are all important.
Creating secure electronic backups
Before you address the issue of securing physical copies, I’d suggest ensuring you have electronic versions of these documents. I keep mine organized in a specific folder in the cloud. Examples of cloud storage providers include Google Drive, DropBox, iCloud, and OneDrive.
Regardless of which you use, anytime you have sensitive information in an email or the cloud, you must secure it safely. We recommend using multi-factor authentication with your email, banking, and other accounts.
When you log in, you can’t simply use your username and password; you must also enter another code received by text message or generated by your phone. As we understand it, it’s best to use the method where you generate a code with an app on your phone. This means that if a bad actor (say Jim Carrey) obtains your username and password via a data breach, that’s not enough to access your accounts since they’d *also* need your phone.
It’s also a best practice to use different passwords for different accounts and not share the same one across accounts. Additionally, it’s good to use longer passwords (for instance, more than 12 characters). This can make remembering them challenging, primarily if you use characters and avoid common words. To make it straightforward to use complicated, unique passwords, many people use “password managers” such as 1Password, which was named best overall by NYTimes Wirecutter.
Should I put my physical documents in a safe deposit box?
You should only put important documents in a safe deposit box if you plan to make sure other people you trust can access the box, including knowing where any physical key is that they may need to gain access.
Many people make the mistake of putting a box in their name, putting a power of attorney, will, and trust documents into a safe deposit box, and not giving copies to the people they want to act in the case of their death or incapacity.
This sets up a silly catch-22 where the owner of the box dies or is hospitalized, but the executor can’t get the box open because the documents that *prove* they are the owner’s agent or executor are locked in the box, which can’t be opened until they prove they’re the agent or executor, which of course can’t happen.
If you plan to use a safety deposit box, confirm the bank’s policy on how to avoid this problem. For instance, perhaps they will accept a letter of instruction to allow access to another individual under certain circumstances or the bank will accept a copy of the documents to access the originals.
If you are worried about timely access to documents, remember that most safe deposit boxes are only accessible during regular banking hours, which can be narrow.
What about hiding things in a clever place in your attic?
This approach has some strengths. It’s convenient and likely secure if you are good at hiding things.
There are a few major issues though:
Once, I hid the Hanukkah presents we bought for the kids so they wouldn’t find them. I did such a good job that they never did—unfortunately, neither could I. Someday, I’ll find those presents, but I haven’t yet. It didn’t matter much at the time—we just bought different gifts—but hiding your critical documents too well could be a major problem.
Also, what if, God forbid, your house burns down? So would your documents.
What do you (Zach) do?
Personally, I store my documents in a fireproof safe. I just chose one recommended by Wirecutter. I mainly care about the fire resistance rather than the lock. Hearing all the tragic, heartwrenching stories from LA has made me think about adding a binder/organizer to sit in the safe that can be quickly removed if we ever need to go in a hurry for any reason. The review for this product looked promising but the binder was a few tenths of an inch too tall for my setup so I’ll get something that isn’t fireproof and meets my size specs.
It would be bad if all your important documents, cash, or jewels were in a safe, but no one knew where the key was. So, make sure that at least whoever would execute your will knows how to access it. In my case, I’ve shared the details with various close relatives and friends (if you are reading this, thanks for using some of your mind space on this trivial matter!).
It does seem like it would be very dramatic to have a safe hidden behind a painting with exciting things inside. Alas, I am not that interesting. I don’t keep actual valuables in my safe. The contents are actually pretty boring and worthless to other folks–passports, birth certificates, etc.
I’ve noticed that my safe tends to get humid, so I added a cup of rice to help absorb the moisture.
Okay, that’s all great but where should I keep my stuff?
There are many good options (safe deposit box, binder, fireproof safe), but no perfect option. The key is choosing one that works for you and ensuring a few people you trust know how to access it.
Any of these systems will be better than no system at all. Organizing your items to a specific place will save you hunting for them before your next trip, where you need a passport, and that’s probably the most valuable reason to keep organized.
Always consult a financial, tax, or legal professional familiar with your unique circumstances before making any financial decisions. This material is intended for educational purposes only. Nothing in this material constitutes a solicitation for the sale or purchase of any securities. Any rates of return are historical or hypothetical in nature and are not a guarantee of future returns, which may be lower or higher. Investments involve risk. Investment values will fluctuate with market conditions and security positions, when sold, may be worth less or more than their original cost.