We all accumulate important papers and documents over time. One of the dilemmas we may face is how to store them securely so we can find them again when we need to.
There’s a veritable plethora of personal information that’s important – and even though it may not be valuable in the monetary sense, it may be difficult to replace if lost or destroyed. This information may include, but is not necessarily limited to the following:
- Birth, death and marriage certificates.
- Driver license, passports, professional licenses and registrations and other licenses.
- Social Security cards, health insurance cards, insurance contracts (life, health, LTC, home, auto, etc.).
- Real estate contracts, deeds, closing statements, mortgage agreements and notes.
- Divorce papers/decrees, custody agreements and legal correspondence;
- Records concerning employment taxes for household, domestic or caregiving employees.
- Wills, trusts, powers of attorney and other advance health care directives.
- Tax returns, home improvement records and investment records
The list above doesn’t even begin to deal with the documents you may need to keep if you own a business.
Some issues to address may include: (1) where to keep this important stuff; (2) how long to keep it; and (3) what to do with important stuff no longer needed or wanted.
WHERE TO KEEP IMPORTANT STUFF
There are a few categories of places where people can store information, each with its own advantages and disadvantages. The best answer may depend on the amount of storage space available, and the specific information being stored.
- Store at home:
- The use of the office filing cabinet is a simple and accessible means of storage. However, unless specifically constructed to be fire resistant, it may not be the best answer. In addition, it may not offer a great deal of security and protection from determined unintended visitors.
- A locked fireproof safe, perhaps installed permanently in a concrete basement floor, might offer additional protection and security without sacrificing a lot of access. However, depending on the size of the safe, space limitations may force some prioritization of what to store in it.
- Store away from home:
- Perhaps the most common place outside the home where important documents and perhaps other valuable items are stored is in a bank’s safe deposit box. Space limitations may again result in the need to prioritize what is stored in this manner. In addition, accessibility is limited to bank hours and to the physical location of the bank.
- Please see our article entitled “Safe deposit Boxes May Be Less Safe Than You Think” in our 2020 third quarter newsletter for some additional information1.
- Store in the cloud:
- Storage on-line may provide a great combination of security and accessibility, if good encryption used is good, access to the on-line storage website is secure and the rest of your cybersecurity life is in order. In short, a weak link in the cybersecurity chain can cause more than that one link to unravel.
At the risk of further complicating matters, the best place may depend on the type of information being stored. For example, when an attorney creates a will for a client, the client may maintain possession of the original will or the attorney may retain possession in his/her fireproof safe.
Generally, there can be only one original will. A photocopy might not be admitted to probate if the original will cannot be found and it was last in the client’s possession - as there may be a presumption of revocation. This presumption might not be present where the lost will was last in the attorney’s possession2.
HOW LONG TO KEEP IMPORTANT STUFF
Here again, the best answer may depend on the amount of storage space available, and the specific information being stored.
Regarding tax records, often keeping them for at least seven years is considered a safe answer3. But many other kinds of records (such as birth, death and marriage certificates, Social Security cards, deeds, patents, bills of sale and military discharge papers) should be kept much longer, if not forever4.
If there is secure capacity, opting for a longer retention may be better than cutting it short. Longer, if not permanent retention might be selected for things like property appraisals, mortgage records and retirement and pension records in addition to the examples above.
At the risk of further complicating matters once again, one might ask if it is possible to keep records too long. Obviously, the longer you retain materials containing confidential personal financial and/or health information, the greater the risk of exposure due to theft, breaches, hacks or subpoena for litigation. These risks need to be balanced against the benefits of maintaining data retention.
HOW TO DISPOSE OF UNNEEDED IMPORTANT STUFF
Once you have decided that you no longer want or need to keep stored information, disposal becomes the next challenge. If the information is important, personal and/or confidential, secure disposal at the end of the retention period is important.
For hard copy records, shredding is a great way to destroy them. There are commercial shredding companies that can destroy your hard copy data so that the resulting pieces cannot be reassembled. They can provide a certificate of destruction5.
Certainly, you can purchase your own personal shredder. However, not all shredders are created equal. The smaller the particles created by the shredder, the more secure the destruction. Cross-cut shredders form confetti-like pieces. Micro-cut (sometimes referred to as nano-cut) shredders may be considered to be more secure6. Strip-cut shredders, creating long narrow strips are the least secure7.
Paper shredding security levels are often labeled P-1 to P-7. The higher the number the greater the security. Level P-4 or above is generally considered as acceptable for most businesses8.
But there are things aside from paper that may need destruction. What about the disposal of data on computer hard drives, disks, video tapes, prescription bottles? Many commercial shredding companies can destroy this data as well so that it is rendered unusable and/or inaccessible.
What data to collect, how to store it for easy access, how long to keep it and how to dispose of it requires some thought, organization and planning. These certainly are issues that may be part of a comprehensive plan. If they are not part of your plan, feel free to give us a call.
CRN-6164304-121523
- f3a857bc-b93a-4253-a47b-f973bc155996.pdf (fmgsuite.com)
- Probating a Copy of a Will if Original Can't Be Found (natlawreview.com).
- https://www.consumerreports.org/money/taxes/how-long-to-keep-tax-documents-a5302825423/#:~:text=To%20be%20on%20the%20safe,papers%20should%20be%20kept%20indefinitely.
- https://www.uschamber.com/co/start/strategy/how-long-to-keep-business-documents#:~:text=Legal%20documents%3A%20It's%20best%20to,and%20other%20ownership%20records%20indefinitely.
- https://www.shredall.co.uk/blog/when-should-a-record-be-destroyed#:~:text=Any%20records%20that%20contain%20confidential,risk%20if%20it's%20not%20destroyed.
- https://www.recycling.com/cross-cut-vs-micro-cut-shredder/
- https://www.recycling.com/best-strip-cut-shredder/
- https://www.whitakerbrothers.com/pages/paper-shredders-security-levels-reference-chart