Keeping your financial information in order in preparation for unexpected disasters, is something that certified public accountant Kem Washington preaches.
She should know. Washington, an instructor of accounting at Dillard University in New Orleans, experienced the devastation of Hurricane Katrina in 2005, losing her home to the flooding that occurred after the levees broke.
The cornerstone of disaster preparedness — whether for a home or a business — is keeping your comprehensive financial information ready to take with you in case you need to make a quick escape, Washington says.
“No. 1 is to have your disaster financial plan in place," she said. "That is, make sure you have all of your policy numbers, account numbers, insurance documents, titles, mortgage information, birth certificates and wills in a place ready to go if you need to evacuate.
“Also, keep copies of your filed tax returns for the previous three years. That way, if you can’t get home, you can easily prepare your taxes for the following year.”
A small business owner who needs funds to float through the disaster’s aftermath and requests a low-interest emergency loan from the Small Business Administration will need the data in those returns, because the agency requires the prior three years’ tax returns, said Washington.
In the event of a disaster, the IRS will provide copies of prior returns free of charge if you file Form 4506, but it may take longer than is convenient.
Washington also advises making a list of all your personal possessions and their appraised values so that if you need to account for your losses you have the information. She suggests checking into resources such as the Insurance Information Institute’s knowyourstuff.org, a website where — for free — visitors may create an inventory of their possessions and list the value of each item.
Taking all the necessary steps to create copies of essential documentation may prove to be a waste of time if you do not store them safely. Major office supply stores offer fire-proof, water-proof, hand-carried safes for protection of paper documents and electronic data.