Blogs

Author: Pooja Munjal
Published On:June 27,2017

The Three step plan to keeping financial records for your family (in case of an emergency)

You may not be able to predict or control some aspects of the future, but you sure can take the necessary steps to control its impact. In case of any kind of emergency, an accident, if you become incapacitated, or even death, it is extremely important that your family is not completely in the dark about your financial details and information. 

Being unaware of the finances can really add to the already existing set of problems your family might face under unforeseen circumstances.

Here are steps to keep your financial records so that your family in not in the dark at the wrong time.

1. Make an emergency list

Make a complete emergency list including the details and location of all important documents and other possessions. Here is an elaborate and inclusive emergency list –

  • Safety deposit box key
  • Important accounts and passwords
  • Credit and debit cards
  • Birth certificate
  • Bank account information
  • Investment details and relevant information
  • Current bills and dues
  • Loans and liabilities
  • Health care benefits
  • Life insurance policy
  • Car insurance policy
  • Property and fire insurance policy
  • Will
  • Living will
  • Power of attorney
  • Property ownership information
  • Car title
  • Home/Property deed of sale
  • Income tax returns
  • Other valuable objects and possessions
  • People to contact in case of emergency

2. Organizing financial information

Once a family member or friend knows where to find the important documents and information, it is important that they find it in a systematic and organized manner to be able to understand it completely and correctly.

File all the bills systematically, either alphabetically or chronologically. Match all your bills to your cheque book so that the information regarding monthly expenses and dues is clear.

All canceled cheques and monthly account statements must be filed properly to keep a track of deposits and income tax deductions.

Make an annual list of investments and sources of income. This list will help to generate the financial information necessary to be reported on income tax forms. Make sure you also list out refunds, if any. This kind of annual list of financial information will help your family members and friends know what to look for in the following year/years.

Such emergency lists and annual list of financial information can be made easily using spreadsheet software. Organise all the information systematically and save it on a hard drive or even a pen-drive.

3. Handing over the information

Handing over the emergency list in the right manner and to the right person is just as important, as it is to make such a list. If this list is not with the right person and for the right reason, all the effort that went into making the list is in vain.

The emergency list so made can be kept in personal possession, or can be handed over to a trusted family member or friend. Discussing and confiding into at least one trusted family member or friend with the information is very important.

Another option is to hand it over to a trusted third party, like an accountant or an attorney. You can also keep away a copy of the list secured in a safety deposit box. This way only a trusted family member or individual will be able to access your financial information.