Tuesday, February 24, 2009

Legal ease: Don’t let precious paper pile up

The dark days of winter are leaving, but the long days of winter are yet to come as we crowd into the end of February. If you want something important to do that will be helpful for you and for your family, then it is time to dust off several important papers in your house and get them in a single, safe place.

For many years, my wife and I kept a briefcase by the front door. In the briefcase were our passports, birth certificates, insurance policies, estate plans and other valuables that could be taken out of the house in a moment’s notice in the event of fire. As time went on, we purchased a fireproof safe. Too heavy to carry, but fire safe.

A really great project for this time of year is to gather up all of those papers and get them into a fireproof box or safe. These documents, while not impossible to replace most of the time, are very difficult to replace. Birth certificates and baptismal certificates are still necessary items when you hire for a new job or need a passport.

With passport requirements changing at borders, these documents are more necessary than ever. Having them safe is also important. I can spend $20 and get my birth certificate, and it may just take three weeks to get. But more than likely when I need it, I need it today, not in three weeks.

Your insurance policies also are important. This tells you what your house and its contents are worth. Since you bought that couch back in 1965, it has gone up in value and its replacement will require a lot more money. Simultaneously, you and your spouse may have accumulated jewelry, guns, coin collections, rare stamps, stocks and bonds, children’s birth certificates and the pedigree of your dog.

All of these documents are important enough that they should be kept safe and they also should be checked again for value.

The single biggest difficulty I hear about after a house fire is not that there was no insurance (which happens far too often) but rather that the dwelling and its contents were greatly undervalued.

People who are the victims of a house fire or severe damage suddenly discover that the house they paid for will now require a new mortgage to be rebuilt because its value to the insurance company wasn’t updated.

People like to rent a safety deposit box at the bank, but there are a couple of things to know first. If you put the box in your name only and something happens to you, there is a list of problems if someone has to get in it.

First, somebody has to know that you have a safety deposit box. They have to know where the key to the box is or the box has to be drilled out and the lock replaced, which costs money. Third, because the box is an important item, you have to have a court order to get in if someone is incapacitated or dies.

When the court order gets issued to open the safety deposit box, some tax authority has to be standing by when you open it to be sure there isn’t an excessive amount of cash or property on which you may be obligated to pay taxes.

If you’re renting a safety deposit box to keep your insurance policies in, you’re paying for awfully expensive storage. A good floor safe will keep an honest person honest.

You may not be interested in keeping grandpa’s gold watch there, but keeping a document safe in the closet of your bedroom means you can access these important documents and they are safe from fire and hazard. And this may cost you less than a couple of months of safety deposit box rent. A couple of screws in the floor or a cable around the back stud of the closet will keep anybody from running off with the safe.

A safety deposit box will certainly keep thieves away from the expensive valuables. But a good safe or fireproof box in the floor of your closet will certainly give you substantial peace of mind concerning your policies, important documents, and the valuables you will find time-consuming and difficult to replace in the future.

So get those policies updated and your important documents safe.

Mark Osterman is a lawyer in Kenai and has practiced in Alaska, Michigan and federal courts for 19 years doing family, commercial, divorce and criminal law. The information in this column is not intended to be used as legal advice. Please contact a legal professional for specific questions.

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