Lessons to Be Learned from Recent Disasters
While we never like to see the damage and destruction caused by natural disasters, such as the floods in North Carolina, it can be an opportunity to take stock of our own situation. Disasters remind us of the unpredictability of life and highlight the need to ensure our personal and financial affairs are in order. While you might think that large-scale disasters won’t affect your area, people in North Carolina and Tennessee likely felt the same until disaster struck. With that in mind, here are a few key aspects to consider when planning for unforeseen events:
- Estate Planning Documents. Imagine being injured during a natural disaster, only to discover that your health care power of attorney has been destroyed in the chaos. Without it, your family might struggle to make critical decisions on your behalf. The same applies to financial powers of attorney, wills, and trusts. If those documents are lost or damaged, your loved ones could face significant legal and financial challenges.
To avoid these situations, you should have a copy of your documents in a safe, secure location. One easy solution is to keep a digital copy with your attorney. Most law firms keep their documents digitally on secure servers. If your law firm does not already have a digital copy of your documents, consider asking them to add your documents to their server. If you do not want to have digital copies of your documents, make a paper copy and leave with your attorney or another trusted person.
- Insurance. Have you reviewed your insurance policy with your insurance agent to access how your policy would address a disaster such as fire, tornado or flood? Some of those affected by the recent flooding never imagined they’d need flood insurance—until it was too late. Be sure to have a discussion with your insurance agent as to what type of disasters are covered and, more importantly, what disasters are not. If your policy lacks coverage for certain disasters, consider adding endorsements to extend your protection. Acting proactively ensures you're not left scrambling when a crisis arises.
- Business Succession. What would happen to your farming operation if the primary manager were suddenly injured, incapacitated, or unavailable? Having a clear succession plan is essential to ensure the farm continues to operate smoothly in the face of such disruptions. Establish a plan that designates individuals—either from within the operation or externally—who can take over management duties if the primary leader becomes unavailable. Ensure that they are familiar with the day-to-day operations and responsibilities.
Also, Make sure that all essential business records are regularly backed up and that copies are stored securely, either digitally or at an offsite location. This is crucial in case the main office is destroyed or inaccessible. Would you know what bills need to be paid in the next 30 days if the office is destroyed in a fire?
- Contact Information. If your phone was lost or destroyed, would you have the contact information for important people—like family members, employees, advisors, or key vendors? With smartphones storing most of our contacts, many of us only have a few numbers memorized. While you could eventually track down phone numbers, the last thing you want to do during a disaster is scramble to find essential contacts. Create a list of contact information for those you may need to reach in an emergency. Store a copy of this list somewhere outside your home or office, or give it to someone whose number you have memorized. This ensures you can quickly access critical phone numbers and emails when needed most.
While most of us may never experience catastrophic damage from floods, fires, or tornadoes, some of us inevitably will. How prepared are you for the unexpected? Being unprepared only makes a disaster more difficult to manage. Take an hour or two now to develop an emergency plan—this small investment of time will help you respond more quickly and avoid making a challenging situation even worse.