Have you ever watched bank robbery movies, or better yet, spy movies where secret keys lead to random safe deposit boxes full of cash, bags of coins, precious gems, weapons, damaging pictures, evidence and clues? You may find yourself asking, “Is this what Safe Deposit Boxes are used for?”
Safe deposit boxes at banks have been around for a long time since the dawn of the bank vault. Their purpose is to provide their owners with a secure place to store valuable items in bank vaults versus home safes where less sophisticated thieves, fires, the elements, and other possible disasters could otherwise put the contents at risk of loss.
Although safe deposit boxes offer far more security than home safes, it’s important to understand how they should be used and the potential risks involved. It may not seem obvious to some; putting cash in your safe deposit box is NOT FDIC insured. Only your bank accounts are covered. Contents of the boxes may also not be covered under your renter’s or homeowner’s insurance policies.
We all have important documents and cherished items we want to keep safe. Using a safe deposit box can limit your access and may even be a hassle once a death has occurred and a death notice has been received by the bank that would then restrict access by court decree.
Home safes may end up being a better alternative and most safes today can withstand certain levels of fire, weather, and damage. They are far more accessible and manageable. Many safes are rated to give consumers choices on various levels of security and protection. The manufacturers may even guarantee the contents if their products fail.
But if you are still interested in bank safe deposit boxes, consider the following “key” points when using them:
- Don’t store original legal and probate documents. – If there are important legal estate documents in your box when you die, it will be difficult for your heirs to get their hands on them, especially if the whereabouts of the keys are unknown and if banks require a court decree of your probated estate before they’ll allow access.
- Consider which items you need access to regularly versus occasionally. – Items like your passports, social security cards, birth certificates, marriage certificates, death certificates, insurance policies, digital drives storing photos or insurance inventories, family photos, titles, deeds, jewelry, collectibles or other items that can be legally stored in a box (usually weapons are not allowed). It can be an inconvenience to always have to go to the bank to get these items when bank is only open on certain days and times.
- Don’t lose your keys. – It’s hard to open your bank box without your keys. Ironically, if you use a safe deposit box, securely storing your keys to access the box is important.
- Choose a convenient location and reputable bank. – If you want to secure some items that you may need to access more frequently, it makes sense to pick a spot that is conveniently nearby. But don’t forget, banks are not immune from floods or fires, so you may want to ask about their fire and flood protection.
- Keep a list of contents and location of your box. – In today’s fast paced world, it’s easy to forget, especially for the elderly. Keep a record of contents of your safe deposit box in a secure location at home to refer to if you can’t remember what’s inside or at which bank. It’s not uncommon during probate to discover that the recently deceased had a safe deposit box and it would help your executor to know where the box is and its contents.
- Keep those you trust informed. – Make sure that those people you trust know that you have a box and keys, wills, other important documents and where they are located. Using a trusted advisor like Avidian Wealth Management can help possible digitally store your important documents and be a primary contact for your executor.
Safe deposit boxes do serve a purpose; however, these days they are becoming less relevant in the digital world. When choosing to use one, it’s important to consider the requirements, risks, legalities and these best practices.
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