A safe deposit box can be a good place to store the documents
that you and your loved ones will not need in a hurry. Examples include
birth certificates, deeds, car titles, etc.
It may surprise you to learn that your safe deposit box is not the optimal place to store your estate planning documents. These items are often needed unexpectedly, on short notice, and getting access to a safe deposit box can be a drawn-out process for loved ones. Depending on whom you have authorized and whether or not they have a key, there can be significant delays getting authorization to access it. Sometimes court approval is needed.
Here is something else that may surprise you: A safe deposit box may not provide your valuables with the kind of protection you think it does. A July 19, 2019 article in The New York Times notes that most people do not read all the fine print on their rental agreements. They assume that the contents of their box are insured, similar to the manner in which the bank and the FDIC insure bank accounts. That assumption is wrong. Banks do provide some protection against loss and theft, but it is limited. According to the article, JPMorgan Chase has a $25,000 maximum on liability. Citigroup caps its coverage at 500 times the annual rental fee. And because there are no federal laws governing what a bank must compensate you for in the event of loss or damage - even if demonstrably the bank's fault - collecting for damages can be extremely difficult.
The New York Times article provides a number of examples. Among them is that of New Jersey resident Philip Poniz, who stored his collection of rare timepieces in several safe deposit boxes at Wells Fargo. Their value was in the millions. One day Poniz opened up one of his safe deposit boxes and found - nothing. The bank had confused his box with that of a delinquent customer it evicted. The bank had removed Poniz's items and shipped them to a holding facility in North Carolina. Some of the timepieces were ultimately recovered and returned to him, but seven items remain missing. Poniz' case against Wells Fargo is still ongoing. Reflecting on a lesson learned too late, he has said: “My impression about safe deposit boxes was that it was like you were putting things in Fort Knox.”
It may surprise you to learn that your safe deposit box is not the optimal place to store your estate planning documents. These items are often needed unexpectedly, on short notice, and getting access to a safe deposit box can be a drawn-out process for loved ones. Depending on whom you have authorized and whether or not they have a key, there can be significant delays getting authorization to access it. Sometimes court approval is needed.
Here is something else that may surprise you: A safe deposit box may not provide your valuables with the kind of protection you think it does. A July 19, 2019 article in The New York Times notes that most people do not read all the fine print on their rental agreements. They assume that the contents of their box are insured, similar to the manner in which the bank and the FDIC insure bank accounts. That assumption is wrong. Banks do provide some protection against loss and theft, but it is limited. According to the article, JPMorgan Chase has a $25,000 maximum on liability. Citigroup caps its coverage at 500 times the annual rental fee. And because there are no federal laws governing what a bank must compensate you for in the event of loss or damage - even if demonstrably the bank's fault - collecting for damages can be extremely difficult.
The New York Times article provides a number of examples. Among them is that of New Jersey resident Philip Poniz, who stored his collection of rare timepieces in several safe deposit boxes at Wells Fargo. Their value was in the millions. One day Poniz opened up one of his safe deposit boxes and found - nothing. The bank had confused his box with that of a delinquent customer it evicted. The bank had removed Poniz's items and shipped them to a holding facility in North Carolina. Some of the timepieces were ultimately recovered and returned to him, but seven items remain missing. Poniz' case against Wells Fargo is still ongoing. Reflecting on a lesson learned too late, he has said: “My impression about safe deposit boxes was that it was like you were putting things in Fort Knox.”
No, your safe deposit box doesn't measure up to Fort Knox-level standards. But you can increase the level of protection by insuring the box's contents. There are companies that are specifically in the business of insuring the contents of safe deposit boxes, so check around. Do not assume that your homeowners insurance policy covers items kept outside your home; it may not.
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