The Slow Death of the Safe-Deposit Box
As an estate planning attorney, I’ve had my share of discussions about safe-deposit boxes. Some of my clients still use them to store legal documents and valuables. My attitude toward safe-deposit boxes has changed over the years. Here’s why:
Safe-deposit boxes have been around since the early 1800s. There was actually a company called The Safe Deposit Company of New York which provided a secure box for cash, gold, jewelry, heirlooms, etc. Banks quickly adopted the model, building large vaults with many small individual lock boxes inside.
Be aware that while your bank account is FDIC insured, the contents of your safe-deposit box are not. In fact, if you read the fine print on your safe-deposit box contract, you’ll probably see a disclaimer regarding responsibility for lost or stolen items.
Beyond that, they can also be a hassle. Most require two keys to open; one held by the customer and the other held by the bank. More importantly, and this is where I see real problems, woe to those who die without another name or their trust listed as the owner on their box. I’ve gone to court more than one time simply to get an order to open a safe-deposit box. That’s both time-consuming and costly.
The world is changing quickly, and things like digitization of documents, bank consolidation, and regulatory rules are starting to write the obituary for safe-deposit boxes. Few, if any, banks are installing them in new branches and many banks are closing any boxes that are given up by the customer.
I now advise safe-deposit box owners that it’s time to consider alternatives, including a heavy and secure fireproof safe in your home. Many documents, including insurance policies and deeds, can be digitized. I personally scan and keep most of those documents on a hard drive. There is typically no requirement that you maintain the original. Even vehicle titles are now going electronic.
Coins and jewelry are a different story. I recommend a safe at home, but I also tell clients that if you’re not using it and it’s tucked away in the box, why not consider giving that special coin or ring to friends or family now so you can see them enjoy it.
Slowly but surely banks are turning away from being landlords for your personal items. I think it’s time to take the initiative and rethink your storage system now.
Fun Fact: I dictated this edition of Up Early on my phone. That got me thinking about how much I look at it and my wife told me that on average people check or look at their phone between 80 and 100 times per day, with those in their 20s or younger around 120 to 200 times a day.
