Hard copies, thumb drives and the cloud: How to handle vital records when it’s time to flee

Dear Liz: We are assembling our important document to-go box with the typical things advised should we need to evacuate, such as birth and marriage certificates, passports, insurance documents, mortgage statements, etc. Many of the documents can be accessed online, so I wondered about pay-off statements from old loans and mortgages. Is it important to take copies of those? Also, what about grant deeds from previous properties that we no longer own?

Answer: In a disaster, you’ll need information to help you establish your identity and document what you currently own. Focus on safeguarding the most important paperwork and figure you can recreate the rest if necessary.

Start with documents that would be time-consuming or a hassle to replace, such as passports, birth and marriage certificates, immigration records, military records, vehicle titles, home inventories, appraisals, home plans or blueprints, recent tax returns and wills or other estate planning documents. The originals should be stored in a water- and fireproof place, such as a home safe or other secure location.

Consider storing copies of these documents, along with photos of your driver’s license and vehicle registration, on an encrypted thumb drive in your go bag or in a secure cloud-based storage service (Everplans is one option.) You could put physical copies in your evacuation bag, but much of the information could be helpful to an identity thief if stolen so you’ll have to weigh convenience against security.

Insurance policies are usually accessible online, but you may want to include your insurance companies’ contact information and policy numbers.

Also consider digitizing any family photos that aren’t already stored in the cloud. You may not have time to grab albums, and disaster victims often lament not having copied irreplaceable photos.

Credit cards and co-signers

Dear Liz: My son is in his mid-20s. He has a credit card that we co-signed and that has a credit limit he would likely not qualify for on his own. He would like to remove us as co-signers as he starts to take more personal control of his finances. Would it make more sense to apply for a new card using only his income information, and then slowly stop using the old card? Or is it better just to take the hit on his credit rating now and request our removal from the old card?

Answer: It’s not clear whether you’ll be able to bow out of this arrangement without closing the card. Most major credit card issuers don’t allow co-signers. More typically, parents would add their children as authorized users. While the parents can remove their children from the account, the opposite isn’t true.

If this is a co-signed card, the issuer may have an option for removing you. Your son will need to call and ask.

In general, though, it would be better for his credit to apply for a card on his own and leave this account open.

Roth conversions and holding periods

Dear Liz: Eight years ago I converted a number of stocks from an IRA to a Roth IRA and paid the taxes. Now I am in a position to convert the last shares but want to do it incrementally over the next four years. Does each conversion then require its own five-year waiting period or will anything in the existing Roth now qualify to be withdrawn at any time?

Answer: The IRS requires five-year holding periods before earnings can be withdrawn tax-free from Roth accounts. The five-year rule applies separately to each Roth conversion, so the partial conversions you’re contemplating will each have their own five-year holding period, says Mark Luscombe, principal analyst for Wolters Kluwer Tax & Accounting.

That’s different from regular Roth accounts, where the five-year rule starts the year the account was first opened and isn’t triggered again by subsequent contributions, Luscombe says.

Liz Weston, Certified Financial Planner®, is a personal finance columnist. Questions may be sent to her at 3940 Laurel Canyon, No. 238, Studio City, CA 91604, or by using the “Contact” form at asklizweston.com.