PLANNING FOR FAMILY AND HOME DISASTER RECOVERY
A quick recovery from a catastrophic event requires planning and preparation in advance. You may not be able to save your home, the forces of nature may simply be more than man can push back. Your home is going to be destroyed. But after nature has left you alone with the remnants of your past you have tasks to complete to recover from the ravages of nature.
What if you had prepared in advance of the catastrophic event? There the physical aspects of preparation, having a kit to provide for your biological and safety needs. This post provides steps you can complete today, steps that will speed the recovery process and take less time today than attempting to complete then while you are finding shelter for your family.
After a catastrophic event you will be Angry.
You have experienced tremendous stress.
You are likely in psychological shock.
Preparation will allow you to accomplish the recovery much faster and more completely. You will have the evidence you need to file an accurate and complete insurance loss claim. You will maintain your confidence and that will allow you to be more resilient throughout the recovery process.
A number of sources will be helpful in developing a family disaster plan in case of a disaster. One aspect is assembling and securing a wide range of documents and personal paper-based personal mementos and artifacts. Below is a list of financial documents to consider securing and recording in digital form:
RECOVERY PLANNING STEPS TO ACCOMPLISH IN ADVANCE OF A CATASTROPHIC EVENT
1. WILLS AND LIVING TRUSTS:
Now is a good time to review or prepare a will or create your living trust. You should also update and maintain an “Advance Health Directive.”
2. ORIGINAL DOCUMENTS:
Assemble original documentation and store these materials in a watertight., fire safe storage, preferably at an offsite location. A bank safe deposit box may not be accessible after a disaster. Any offsite location should be reviewed for safety, security and accessibility.
If you have significant valuables that are subject to appraisal, have an appraisal prepared and then updated at least every three to four years.
a. Have the appraisal prepared in both hard copy and as a PDF (digital) copy.
4. DOCUMENTATION – HOME INVENTORY:
Cost records for real property and major items of contents, including jewelry, cameras, electronics, computers, tools and art works.
a. Extensive photographs of all the items for the cost records.
b.Have the photos in both hard copy and in digital form. IRS Publications
IRS Publication 2194 and 2194B are helpful, in particular
IRS Publication 584, “Casualty, Disaster and Theft Workbook” includes worksheet formats that can be used to develop a comprehensive home inventory.
5. PERSONAL DOCUMENTS:
Financial documents to consider securing and recording in digital form:
ü Cost records for real property (escrow statements) and major items of contents, including jewelry, cameras, electronics and art works.
a. Record the cost of significant assets in every room of your home and office in a ledger or journal.
ü Wills, and living trust documents, grant deeds and property escrow settlement statements.
ü Power of attorney, living will (health directive) / medical powers.
ü List of emergency contacts, including doctors, financial advisers, and family members.
ü Birth, death, and marriage certificates.
ü Copies of important medical information, including your health insurance card, doctor’s name and phone number, immunization records, and prescriptions (including prescriptions for glasses and contacts).
ü List of insurance policies (life, health, disability, long-term care, auto, homeowners, renters), including the type, company, policy number, and name of insured, agent contact information, claims contact information.
ü Copies of insurance policies including declaration pages.
ü Adoption papers.
ü Social Security cards.
ü Divorce and child custody papers.
ü Military records.
ü Mortgage/property deeds.
ü Stock and bond certificate-s.
ü Retirement account records.
ü Recent checking, savings, and investment account statements.
ü Vehicle and boat title documents.
ü Inventory of your possessions.
ü Warranties and receipts for major purchases Credit card records.
ü Recent pay stubs and employee benefits information.
ü Rental agreement/lease and/or mortgage documents.
ü Safe deposit box information (location, contents, and key number).
ü Store negatives of photographs, protected in plastic sleeves, separate from the prints.
ü Income tax (federal and state) returns for past seven years, plus any older returns that may include important continuing information.
In addition to the documents listed above, consider making digital copies of significant photos and securing them along with the documents listed above.
6. SAFEGUARDING THE EVIDENCE:
Create PDF files of the documents.
a. Store the PDF’s on data CDs and flash drives – create multiple copies. Send copies of the CDs to trusted individuals who will be outside of any potential hazard area.
b. Check on the efficacy of the CDs periodically.
c. Keep a copy of the CDs in your family disaster kit.
d. Update the CDs at least semi-annually.
a. Have you read your insurance policies lately?
b. Do you have coverage for Earthquake damage?
c. Do you live in an area that is susceptible to mudslides or flooding? Consider the need for coverage under the National Flood Insurance Program.
d. Is your coverage consistent with your present risks?
e. Do you know what is not covered?
f. Was your home built many years ago, under a building code that is now outdated?
g. Do you know if your cost to replace your assets is adequately insured?
h. What is current replacement cost of assets, including compliance with existing building codes?
i. Do you know that the cost to replace your home in a major disaster event will rise significantly? The cost to replace a “production line built home” will rise significantly when you are trying to duplicate it with a “single edition” of the same home.
j. Is your coverage for “Scheduled Property” adequate? Are all the items that you have appraisals for adequately insured?
With the possibility of fire, hurricane, tornado, mudslide, earthquake, tsunami, and severe winds, drought and freezing, all of us are subject to some form of natural disaster at any time – Don’t ignore the possibility.
BE PREPARED, PLAN, PREVAIL
All rights to reproduce or quote any part of the chapter in any other publication are reserved by the author. Republication rights limited by the publisher of the book in which this chapter appears also apply.
Certified Public Accountant
2975 E. Hillcrest Drive #403
Thousand Oaks, CA 91362
(805) 497-4411 E-mail John@TrapaniCPA.com
It All Adds Up For You
This material was contributed by John Trapani. A Certified Public Accountant who has assisted taxpayers since 1976, in analyzing and reporting transactions of the type covered in this material.
Internal Revenue Service Circular 230 Disclosure
© 2012, John Trapani, CPA,