What’s in the Safe?
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“What’s in the Safe?” Ensign, Aug. 1988, 72–73

What’s in the Safe?

Many individuals and families store valuable assets and documents in bank safe-deposit boxes. But is that the best place?

As long as the renters of a safe-deposit box are alive, it probably is. But if the owner of the box’s contents dies, problems can occur, because many states and countries seal the box. This means no one can open or inventory the box until the bank receives a court or government order—which takes time and money. In other states and countries, safe-deposit boxes are not sealed, but one of the owners must sign an approval card to gain access to the box. Your financial institution can tell you which law applies in your state or country.

Where only one owner’s signature is required to access a box, one solution is to add a third or fourth name to an approved list or signature card. But stories are plentiful about boxes being raided both before and after an owner’s demise by those having access to its contents. A better solution is to store in another place documents requiring immediate action after the owner’s death—with a trusted adviser or family member.

Items not to be stored in a safe-deposit box:

Original copies of wills, trusts, and other legal documents. While some argue that these documents should be placed in a bank vault for safekeeping, their ready-reference is an equally important issue. Documents pertaining to your last will and testament could be kept in a safe place at home or with your attorney, executor, accountant, or financial planner.

Mortuary and cemetery information. This information will be needed immediately after your death, so it must be readily accessible. This is particularly important if you have prepaid your funeral costs.

Funeral instructions. Funeral instructions locked in a sealed box won’t do any good. Give them to a trusted family member, and be sure to review and update them regularly.

Cash. Hoarding significant amounts of cash presents two problems: (1) The currency becomes a nonearning asset because its value does not keep up with tax or inflation rates. (2) Its presence may suggest an intent to evade income and estate taxes.

Property belonging to others. Unregistered bearer bonds belonging to a friend or jewelry belonging to a sister may be inadvertently included in your estate and passed on to your heirs if they are found in your safe-deposit box. Imagine the difficulty the owner will have trying to prove otherwise when you, the key witness, are deceased.

Items to store in a safe-deposit box:

Insurance policies. It is wise to store life, property, and casualty insurance policies outside your home to prevent them from being destroyed by a fire or natural disaster. Along with each life insurance policy, you may want to store certified copies of your birth and marriage certificates. (These are officially stamped by a governmental unit, such as a state, country, or province.) Insurance companies often require these documents to prove that you were really the age you claimed to be and that you were legally married to whom you claimed you were. If you have already obtained these certified documents, your survivors need only add a certified death certificate when each policy is surrendered.

Personal papers. Besides birth and marriage certificates, it is prudent to keep citizenship documents and proof of military service in your safe-deposit box. Family histories and genealogical records can also be stored there.

Collectibles. Stamps, coins, medals, gems, jewelry, precious metals, heirlooms, and other prized collectibles can be kept safe in your box. Keep an inventory of these items in another place.

Securities. Stock certificates, bonds, and other securities, whether they are registered in your name or to the bearer, may profitably be kept in a safe-deposit box. In some countries, rent paid for a safe-deposit box is tax deductible when securities are stored there. (Certificates of deposit may also be stored, but they are not considered a security, and fees for their storage are not tax deductible.)

Original contracts and mortgages. Your deeds, mortgages, court decrees, leases, business contracts, and other such papers can also be kept in your box.

Finally, since a bank’s insurance policy does not generally cover the contents of safe-deposit boxes, the box’s renter must cover the contents through private insurance, such as a homeowner’s policy. And make certain someone besides you (or you and your spouse, if applicable) knows where your safe-deposit box is located and where the key can be found.—Roger M. Smedley, Certified Financial Planner, Salt Lake City, Utah