Why Scan?

Michelle Singletary

I've devoted a quite a few words in the past week to ways you can protect your financial records in case of a disaster. So far the methods have focused on physical protections, like portable fireproof boxes. But there is another way to keep your documents beyond the reach of natural or unnatural catastrophes.

Think digital.

Post reporter Yuki Noguchi tells us (Sept. 11, "The Digital Storage Solution") that consumers can transfer "everything from music to tax returns to an external drive usually no bigger than a hardback book."

As Noguchi writes, external hard drives can store much more information than CDs, DVDs or keychain-sized flash drives --- from 40 to 500 gigabytes --- and many can be set to periodically back up important files.

However, one of the bonuses of putting your important documents on a CD is that they can duplicated multiple times, allowing family members or friends who live in other areas to store an extra copy for you.

A more convenient -- though somewhat pricey -- option is an online storage service, which allows users to upload important documents to the Internet, then retrieve them from any Web-connected computer.

For more details on how to safely store your data, click here.

If want to learn even more about what you should do financially in the event of an emergency, read the transcript of my online discussion with Arthur Stein, a certified financial planner and vice president of First Financial Group.

Here's a sample of a few questions readers asked of Stein:

Fairfax, Va.: How are my financial records (bank account, checking account, saving account) protected in a tragedy like New Orleans? Where are the backup records stored? How do the people of New Orleans get access to the bank account and money? How does one pay bills and creditors in N.O.?

Arthur Stein: Hopefully, your bank, investment company, credit card company, etc. will have backups.

However, the best situation is if you have backups somewhere safe. Specifically, copies of wills, power of attorney, health care power of attorney, living will, burial instructions and trust documents should be kept not only at home, but also in a safe deposit box and with an attorney and/or anyone named as able to act on your behalf.

Someone should also have instructions about the location of the safe deposit box.

Other financial documents that need to have copies sent to an attorney, relative or friend, or placed in a safe deposit box, include: deeds to homes, titles to cars, receipts for and photos of personal property, and any other legal documents.

Finally, everyone should make lists of insurance policies, investments, real property, trusts, personal property, prescription drugs, names of doctors, and employee benefits.

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