Safeguarding Your Documents from Natural Disasters

In an article last fall we discussed the consequences of lost Wills and Trusts, along with suggestions about where to store these documents. It’s a topic that comes up frequently and, unfortunately, it generally arises after a loved one has died and the heirs have begun the process of settling the estate and are unable to locate these documents.

The recent North Bay fires have brought new focus to the issue of proper storage of important legal documents. More than 40 people died in this tragedy, and many more lost everything, fleeing their homes with nothing but the clothes on their backs. There was no time for rummaging through desks for important legal documents as the flames bore down. Here are some guidelines for creating and storing original legal documents.

The importance of having the original legal documents

Preserving an original document is always advised, as opposed to relying on either a digital scan or photocopy of the original. California has what is known as the Secondary Evidence Rule that allows a person to submit, as evidence, a copy or reproduction as evidence, unless there is a genuine dispute that the copy is different from the original, or if there is some other reason that it is unfair.

Someone who lost his/her original Living Trust can rely on digital or paper copies. A copy you may have in another location–given to a fiduciary, a trusted financial adviser or personal source, may be used. Even if you don’t have a copy yourself—which would be the case with the fire victims, there may be copies out there.

Make a digital copy and save it to a Dropbox folder or the Cloud

These days, the general recommendation is to make a digital copy of your legal documents and save them online, either in a Dropbox folder or the Cloud. If someone–a disinherited heir or a disgruntled family member–disputes the copies as originals, they well may become inadmissible.

A better solution: Execute a new Trust, avoiding any dispute about its being a copy

If you’ve lost your original documents but have access to copies, it is advisable to execute a new Living Trust. Get it notarized, and it now becomes an original, avoiding the possibility of someone’s disputing its legitimacy. Further strength can be given to these documents by including language stating copies may be relied upon if presented. This helps organizations, such as banks or title companies, accept the documents as legally binding.

No copies, no validating the terms of the Trust

If no copies exist, then you’ll have to create new documents. If the person who originally created them for you is still alive and in business, creating new documents will likely be straightforward. (A caveat: It’s likely that your Trust was out of date anyway; this might be a very good time to review and update it.)

The most tragic situations are those when the person who created the trust dies, and no copies are found anywhere. With you out of the picture, unable to assist in recreating the terms of the Will or Trust, it will be as if the documents never existed.

A few other thoughts on storing your important legal documents

• We always caution our clients to keep the original Trustsin a secure place in their homes or offices.
• As a backup, you can give a copy to your successor Trustee and/or another trusted friend or family member.
• A safe deposit box always come up in discussions, but this may not be the best solution, as it could require a court order to open the box if it’s in your name without a joint owner, or if you neglect to title the box in the name of your trust. This means your Trustee wouldn’t have immediate access if you became incapacitated or died. Keep your Trust in a fire/waterproof safe in your home or office. Share the combination with someone you trust.
• If these other options are not realistic, keep your documents on a high shelf—away from floods, children and animals, though this strategy would have been meaningless for the North Bay fire victims.

Make sure your family knows the location of your Trust

Make sure your family knows you have prepared your Living Trust and where it is located. In addition to the bound copy of the Trust that we provide, we can also offer an electronic version, and many families share this with their heirs. Remember that many years may elapse between the time the Trust is prepared and the time it is needed to settle an estate, and circumstances can change. Successor Trustees themselves may die or become incapacitated. It may be advisable to share the Trust with several trusted family members. Most of all, don’t hide it—if people can’t find it now, there’s little chance they can find it when they need it.