When I was growing up, safety deposit boxes were considered the epitome of a safe storage place for jewelry and important papers like wills, mortgages, car titles. Today, banks have changed their footprint and the need for a safety deposit box has lessened. According to an article in The Pittsburgh Post-Gazette from December 29, 2019 written by attorneys Julian Gray and Frank Petrich, you may not really need a safety deposit box.
First, even though the banks may be insured by FDIC, the contents of the boxes are not insured. FDIC only insures deposit accounts which are checking, savings, certificates of deposit, etc.
Second, the contract that is signed when you rent a box probably states the limited liability the bank has for box contents and this may significantly be well below the value of the contents.
Third, if there is only one signature on the box contract and that person dies, “the bank will seal the box until the personal representative of the estate appointed by the court shows up to claim the contents.” In Pennsylvania, that representative has to make an appointment with a revenue officer from the Department of Revenue to be at the bank when the seal is broken so the contents can be inventoried and taxed if appropriate.
Fourth, the cost of an in-home safe is relatively low and the convenience of being able to access critical papers quickly is important.
Bottom line, if you have a safety deposit box, examine the reasons for continuing the contract. If you don’t and are thinking about renting one, do a cost-benefit-analysis for renting one.
Until next time…