Once a financial document has outlived its useful life, it is sound policy to see that it is destroyed in a way that would prevent it from being retrieved and used by anyone else. This is typically accomplished by contracting with a qualified document shredding service. But today, so much of our personal documentation is stored electronically. In this case, not only the network but the backup media needs to be purged to be consistent with a secure record destruction policy.
Online record storage via Dropbox, Google Drive, and others is gaining popularity among consumers who don’t want to splurge on more costly, business-oriented, cloud based data providers like Carbonite, pCloud, and Egnyte. No matter what service you use, you need to be mindful about the fate of your documents after you no longer need them or when you stop using or paying for the particular service provider. These types of companies are bought and sold regularly and you need to ask them some key questions before committing to their data management.
- What will happen to my data at some later point in time?
- Will my data always linger in cyberspace long after I erase it?
- Will my data still be there after I terminate my services?
- In case of a sale or merger, will the acquiring company honor the same User Agreement?
- If the provider goes bankrupt, what happens to my electronic documents?
These and other questions need to be answered to your satisfaction in order for you to feel secure that your electronic records will not fall into the wrong hands. It you have questions about electronic data storage or personal record retention, I can be reached at oikhelson@BerdonLLP.com or call your Berdon advisor.
For a complimentary Personal Record Retention Guide, click here.
Scott T. Ditman, a tax partner and Chair, Personal Wealth Services at Berdon LLP, advises high net worth individuals and family/owner-managed business clients on building, preserving, and transferring wealth, estate and income tax issues, and succession and financial planning.