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Do you own a safety deposit box?

Do you own a safety deposit box?

August 26, 2022

Like rotary phones, phone books, pagers, and so many other things that have become obsolete, safety deposit boxes seem to be headed in the same direction.  We never hear about the younger generations using them. 

I suppose they still have a purpose, but they were often used to protect paperwork in the event of a fire and a lot of people now have fireproof safes in their homes.  If you still have one, I recommend spending a little time thinking things through to determine if it's still needed.  If you decide you want to keep the safety deposit box, here are some things to consider:

1)  What procedure would an appointed person have to follow if you were indisposed, and someone had to get into the box.

2)  Who have you designated to retrieve the contents of the box if you aren't able?  Is that person aware?  Is he or she aware of the procedure that would be required of them?  

3)  Do all of the contents need to remain in the safety deposit box?  Or can some of them be stored at home?  Does anything need to be shredded or thrown away?  Be sure to throw away anything that has expired or is no longer needed.  You'll save a lot of hassle for whoever is charged with wrapping up your estate.

4)  Do you have physical stock certificates and/ or bonds stored in the box?  If so, I highly recommend that you take them to your financial advisor to have them transferred into firm name, which means that they'll be reflected on your statements.  Physical certificates can be extremely difficult for family members or executors to deal with if the owner becomes incapacitated or passes away - with an emphasis on extremely.  In addition, there are numerous corporate actions that can be difficult to trace and, therefore, it's nearly impossible to keep track of values.

5)  Will there be family problems if you designate an heir as the person to dispose of contents?  There's often a perception of mismanagement if someone empties a safety deposit box without all heirs being present, and it's not realistic to expect that everyone can be available for chores such as this.  Executors and trustees are tasked with carrying out procedures outlined in wills and trusts but leaving an heir in charge of the dispensing of contents can create unnecessary misunderstandings.  This is a good reason to use a corporate trustee rather than a friend or relative but that's a topic for another article.  

In short, I'm not a huge fan of safety deposit boxes, but if you're certain you need one, be sure to revisit the contents and the decision, and address the above questions every two years or so.