An emergency can turn life upside down. Not everyone plans for a fire, a natural disaster, or their own death. What if someone steals your identity or financial information? What happens to your will if your lawyer dies?
It’s also important to think about what happens when you’re gone. Who will be in charge of sorting through your finances? It can take months or even years. Imagine if you’ve left your brother in charge, but he can’t find your insurance information. On top of grieving, now he needs to hunt for documents.
Dealing with any crisis is easier with a plan. So plan ahead. An emergency personal financial information kit provides peace of mind. It helps you, or someone else, know exactly what to do when the unexpected happens.
What’s an emergency personal financial information kit?
Your kit is a set of documents and instructions about your personal finances. The kit should include all the financial documents you (or someone you trust) would need to access in the event of an emergency or should you pass away. It should be both physical and digital.
Physical items in the kit
Your emergency kit might be a binder. Or it might be several binders or file folders. Keep everything about your financial information in one place. Your kit should contain…
Estate documents
- A current will (yours and your partner’s)
- Instructions about medical care or end-of-life
- Powers of attorney (health and financial)
Insurance policies
Do you have financial dependents? Include life insurance as part of your emergency kit. Your kit should contain your life insurance policy. You might also have policies for health, disability, business, and insurance.
Tax information
Taxes must be paid, even after death. Your kit should include past tax returns and other relevant tax documents. Include the name of your accountant (if you use one).
Personal finance documents
Your designated person (called a “designate”) will need your investment, savings and retirement documents. If you have a financial planner, they might already have some of this information. Still, to be safe, include it all in your kit.
Instructions
Your kit will have many categories of documents (medical, insurance, banking, etc.). For each category, be sure to include some instructions. Be specific about who to call and what to do. List your account numbers, contact information, and passwords. Your designate shouldn’t need to search for these.
Easy access to valuables
If something happens to you, what happens to your vehicle? Your kit should include keys to your vehicle. What about your bank account? What if you left jewellery to your niece, but nobody knows it’s in a safety deposit box? Your kit should spell out how to access your valuables.
A list of contacts
In an emergency, there are many people to contact. Keep a current list of phone numbers and e-mail addresses of your…
- Medical practitioners
- Employer
- Insurance companies you have policies with
- Financial institutions
- Financial planner
- Bankruptcy or consumer proposal discharge certificate
- Pension office
- Any other important contacts
It’s also a good idea to store a second copy of this kit. Ask a trusted loved one to keep it safe.
TIP: Consider opening a separate bank account for emergencies. Your loved ones could write a cheque for a funeral home, for instance. Experts recommend saving six months’ worth of living expenses.
How to organize your emergency personal financial information kit
Help your helpers by setting up your emergency personal financial information kit so it’s easy to use. A crisis is no time to deal with confusing papers.
Organize
Put similar items in one place For example, keep your car insurance papers together in a folder or binder. Keep bank statements together in order of date. If you have pension documents, keep those together. Find a clear way to find important information. Make life easier for yourself or your designate.
Store your documents
Store physical documents in a fireproof lockbox. Put the lockbox in a safe place.
Shred outdated papers
Once you have a new version of a document, shred the older copy.
Designate someone you trust
If something happens to you, someone needs to deal with your finances. Decide on someone you can trust. Have the conversation. Tell them where to find your documents. Arrange access to your computer accounts, financial records and passwords.
Protect your physical documents
Some documents are hard to replace. These include your original birth certificate, driver’s license, passport, marriage license and divorce papers. In an emergency, your bank and insurance company need these documents. They also require proof of your identity.
Store copies of important documents in a home safe, or a safety deposit box.
In case your kit gets lost or damaged, keep a backup. Go ahead and photocopy your important documents.
Have a paper copy of your…
- I.D.
- bank cards
- credit cards
- Insurance cards
Protect your digital information
For extra security, make a digital copy of your documents. Use a scanner to make digital files. Consider cloud storage. This way, your information won’t be lost. Even if you lose your phone or your computer breaks down, your information will still be safe in the cloud.
TIP: Make a video. Record your entire home to create a record of your belongings. Keep a copy of the video footage in the cloud.
Usernames and passwords
Whoever looks after your finances will need access to your accounts and bills. Keep a list of your usernames and passwords. Protect this list with a password! Only give that password to your designate.
Keep your kit up-to-date
At least once a year, review your emergency personal financial information kit. Make sure it has the latest documents. Also, don’t include outdated contact information. If a number is out of service, that’s not useful.
Enjoy peace of mind
Planning ahead reduces stress. In a crisis, an emergency kit makes life easier.
There’s also a lot of peace of mind that comes along with being debt free. If you’re struggling financially and want help getting on the path to financial freedom reach out to one of our trained Credit Counsellors any time.
