Safe Deposit Boxes Still Beat Under the Mattress

Our last email alert commented it was our last tax message for 2011 but we hadn't realized we were so absorbed in year-end planning that we missed the December "tip-of-the-month".  No one wants to hear any more about Congress' inaction on passing meaningful legislation, unemployment statistics or a less than stellar real estate prognosis.  Marty Abo just came across his misplaced safe deposit box key so how provident to remind others to so consider one.

Most people who have a safe deposit box haven't given much thought about what should be stored in it.  Items that properly belong in the box include:           

• Birth, death, marriage and divorce certificates
• Passports
• Rare coins, stamps or other collectibles
• Jewelry
• Irreplaceable family photos
• Deeds to real estate
• Important legal documents such as divorce decrees and adoption papers
• A copy of your will (the executor  or attorney should have an original)
• Pension plan documents
• Stock and bond certificates and insurance policies          
• Military records and citizenship papers

The box should generally not contain anything you might need in an emergency, in case your bank is closed for the evening, a holiday or the weekend.  Such might include living wills/health care directives, a health care power of attorney, financial information you may need in an emergency, funeral or burial instructions, backups of important computer disks, or irrelevant documents.  It should also not hold your original will in that a Court order will probably be required to so retrieve in the event the safe-deposit box holder dies.

You should maintain a separate inventory of everything that is in the box, duplicates of all documents in the box and a personal property inventory with a video or pictures for insurance purposes (in case of theft or damage).  It's often not a good idea to share the box with anyone but a spouse.  However, it may make sense to register the box in the name of your corporation to avoid restrictions on access to the box. 

You should also be aware that the banks are not responsible for cash kept in a box, and if you keep valuables in the box, it is likely that in the event of their theft, the bank will deny indemnification for losses unless it was negligent. Such contents are also not FDIC insured. Thus, consider the use of homeowners' insurance or other insurance to protect these items since safe deposit boxes are not impervious to theft.  

We often suggest you consider having a designated power of attorney (POA) for someone to handle your financial affairs in case you are traveling or disabled.  The POA may also be used to give them access to your box. However, you should note that, if you die, the individual given the POA will not have access to the box.

The keys the bank provides you receive when you lease your safe deposit box are the only keys that will open the box. You should notify the bank immediately if you lose but, regardless, you will most likely have to pay a locksmith to open the box and replace the lock.