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…
