Over the years I have seen clients struggle to get access to a parent’s safe deposit box after death. More than once, this seemingly simple task required us to open a probate proceeding in court, even though the deceased parent had set up a revocable trust to avoid probate. I’ve said this before: telling a client we have to do a probate even when there is a trust is at the top of my list of least favorite conversations. Years ago, we added a specific line on our estate planning homework for clients to tell us if they have a safe deposit box. This way, we can at least warn our clients who have safe deposit boxes about the risks involved.
Safe deposit boxes have a long history of being viewed as a safe place for our most important documents and valuables. They can offer a certain level of security, and they are useful for storing some things. However, they also come with a set of problems most people don’t discover until it’s too late. Consequently, my short answer to the title question is “No” and here’s why.
1. Safe Deposit Boxes Can Be Difficult to Access at Death or Incapacity
When someone passes away or becomes incapacitated, if the very documents needed to manage their affairs—wills, trusts, powers of attorney—are locked inside their safe deposit box, that is a problem. The only person who a bank will permit to open the box and take items, including documents, out of the box are the signers on the safe deposit box account who come to the bank with the key to the box, or someone who shows up with a court order granting them access.
Your executor needs your will to start the probate process necessary to open the safe deposit box. If your will is in the box, we have a classic Catch-22.
2. Banks Have Limited Hours
Emergencies don’t happen only during normal business hours. Sometimes, time is of the essence. Your family members may need your power of attorney or your advance health care directive in order to be able to help you with something right now. If you are unconscious in the hospital, decisions need to be made, and even if your family has legal access to the box, they may have to wait until Monday morning to retrieve your documents and help you.
3. Items in Safe Deposit Boxes Are Not Insured
We all are familiar with FDIC insurance, which guarantees that the money we deposit in a bank will be given to us even if the bank fails. However, FDIC insurance does not extend to safe deposit boxes. In fact, when you get a new safe deposit box the bank will typically have you sign a release that protects the bank in the event that something happens to the contents of your box.
4. Items in a Safe Deposit Box Can Be Stolen or Lost
It’s not easy to break into a bank and also break into a safe deposit box, but it has happened. In fact, this exact thing happened in Germany just a few weeks ago. Also, banks have been known to open safe deposit boxes for their own administrative purposes, such as when the owner of the box fails to pay the annual fee or when the bank branch closes or moves. As with all human endeavors, mistakes can happen, your box contents can get mixed up with someone else’s and disappear.
So What Should You Do Instead?
1. Most People Can Safely Store Estate Planning Documents at Home
Your estate planning documents typically don’t contain enough private information to enable thieves to hack into accounts or steal your identity – no account numbers or Social Security numbers. If you really are concerned about someone seeing your estate plan before they need to, read on.
2. Use a Fireproof, Accessible Home Safe
A high-quality, fireproof safe at home allows your family immediate access while still protecting your valuables and documents. Obviously, you will have to make sure someone you trust has the combination.
3. Make Sure to Leave Clear Instructions for Your Family
No matter where you store your documents, make sure the right people know:
- What exists
- Where it is located
- How to access it
I also recommend giving a copy of your Advance Health Care Directive to your agent. This can save time and eliminate one source of stress if you end up in the hospital.
[AD] Estate planning addresses many important factors about your future and legacy. Where do you get started if you don’t have an estate plan in place? If you do, how have new laws and life transitions changed? Will your plan still protect you? Regardless, you deserve to have control over your wants, needs, goals, and hopes for the future. We can help you understand your options and, legally, how you will best be protected at all touchpoints. Get started today by scheduling a free discovery call so we can discuss your needs. Visit https://absolutetrustcounsel.com/scheduling/ or call us at (925) 943-2740.
