Safe deposit boxes are an important tool for protecting important documents and valuable items. The boxes, which are usually rented for a yearly fee from a bank or credit union, have become increasingly popular in an age when security is more important than ever before.
In the United States, an estimated 25 million safe deposit boxes are rented each year. That means that 1 out of every 8 adults uses a safe deposit box to protect against the loss or theft of key documents and valuables.
Do you even need a safe deposit box these days?
We know what you’re thinking: with so many documents now digitized, are safe deposit boxes still useful?
The answer is that yes, they are.
Although some documents are now digital, other key documents cannot be digitized or replaced. And tangible personal items — the physical objects that are either intrinsically valuable or hold emotional value — can never be replaced by digital versions.
So despite the rise of the digital era, demand for safe deposit boxes has increased in recent years and will continue to increase in the future.
What normally goes in safety deposit boxes?
Each individual’s safe deposit box will look slightly different, but there are certain items that should always be stored in the box.
Car titles, marriage licenses, social security cards, birth certificates, and other key documents are commonly found in safe deposit boxes.
Those documents are difficult to replace but only needed on rare occasions, so keeping them in a secured box at the local bank or credit union makes sense.
Other tangible items, like insured jewelry, rare collectibles, and family photographs, should also be kept in a safe deposit box.
Read more: 13 items most commonly found in safe deposit boxes
The downsides of a safe deposit box
Although safe deposit boxes are a great way to store and protect your valuables, the boxes should not be used to store everything and anything. This mainly due to safe deposit boxes being difficult to access in a hurry.
And depending on the items you keep in them, they can delay the entire estate settlement process and/or violate your agreement with the financial institution where the box is stored.
Never put these items in a safe deposit box
Unfortunately, few people realize the danger of keeping certain items within a safe deposit box.
Those items are:
- Original copy of wills and trust documents
- Cash
- Passports
- Uninsured valuables
- Firearms
- Advanced health care directives
- Burial instructions
- Burial deeds
- Power of attorney documents
- Spare keys
- Illegal items
Let’s take a closer look at why:
1. The original copy of wills or trust documents
Where to store instead: a fireproof safe in your home office
Few items are more important to protect than your will. Other documents, like trust agreements that create irrevocable trusts after death, are equally important to protect.
These documents are given priority in the estate settlement process, and they serve as the decedent’s final say as to where wealth goes after the decedent’s passing.
Storing a will or trust in a safe could mean a delay in the probate process
Although a safe deposit box would protect those documents, boxes are often “sealed” after the original renter’s death. And even though boxes can often be co-leased between two individuals, some states have laws preventing access to the box when only one of the individuals passes away.
When a safe deposit box is sealed, the executor of the estate may need to receive a court order granting permission to access the box.
To obtain a court order, most states require that the executor provides the deceased’s will and a certified copy of the death certificate. If the will is sealed within the safe deposit box, the executor may not be able to prove that he or she has been named as executor in the will.
A catch 22
Unfortunately, this cycle creates an administrative nightmare — a will is needed to access the safe deposit box, but the will is within the safe deposit box, and only a will can be used to access the will within the safe deposit box.
And regardless of state law, there is no doubt that keeping the will or trust documents in a safe deposit box will delay the entire estate settlement process by weeks or even months.
Pro Tip: Each state has different rules regarding how and when the executor may access the decedent’s safe deposit box. If you are serving as the executor of a loved one’s estate, it’s important to know the rules in the state where the estate is located.
For a comprehensive guide that explains the rules of safe deposit box regulations of each state, go here.
2. Cash
Where to store instead: a bank account
Many people associate bank safes with the imagery they’ve seen in movies: the villain breaks into a large metal safe, letting the door slowly swing open to reveal neatly-stacked piles of cash. Although that imagery might be enticing for Hollywood, it’s not applicable to normal, everyday life. Safe deposit boxes might be secure, but they should never be thought of as being similar to the bank vaults that are commonly found in movies.
One important detail that many individuals don’t know is that safe deposit boxes, unlike bank accounts, are not insured. Cash that is put in a savings or checking account is protected by a government agency called the Federal Deposit Insurance Corporation (FDIC).
In FDIC-insured banks, the standard insurance coverage is $250,000 per depositor. What this means is that your money is much safer — and guaranteed to be protected — in a bank account.
3. Passports
Where to store instead: a fireproof safe in your home
Passports can be difficult to replace if lost or stolen, which is why many individuals believe that the best place to store their passport is in a safe deposit box.
For people who enjoy traveling, however, keeping passports in a more accessible location is a better decision — especially considering that they can be used in place of your REAL IDs that require additional verification in 2022 onward.
4. Uninsured valuables
Where to store instead: insure them first, then put them in a safe deposit box.
Among the most fascinating items commonly found in safe deposit boxes are valuable collectibles and heirlooms. A baseball signed by Babe Ruth, a vintage Rolex that has been passed down through generations, a diamond-studded ring… these are just a few of the items that might be found in a safe deposit box.
With such valuable items, it’s important that individuals insure the objects before placing them in a safe deposit box.
That’s because even though safe deposit boxes are secure, the financial institution where the box is located won’t insure the box’s items from theft or damage. If a fire or flood occurs and the valuables are ruined, the only way you’ll retain the wealth from the valuables is if they are already insured.
5. Burial instructions
Where to store instead: a fireproof safe in your home
When an individual passes away, the estate’s executor will look for any documents that dictate how the individual hoped to be buried.
Did the individual want to have a funeral service? Would they have preferred to be remembered in a memorial service? Did they plan for an in-ground burial, or did they want to be cremated?
Executors and families often face these difficult questions when a loved one dies. In many cases, individuals will leave burial instructions with the executor before the individual passes away. The instructions will state how the individual hopes to be remembered and their preferred method of burial.
If the burial instructions are locked away in a safe deposit box where the executor cannot easily access them, then the executor or family members may be forced to make a decision without knowing the deceased’s true intent.
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6. Burial deed
Where to store instead: a fireproof safe in your home
Individuals who plan for an in-ground burial will often purchase a burial deed, which is a document that conveys the right to be buried or interred in a specific property lot.
The burial deed does not convey ownership over the lot; instead, the deed grants the document holder the right to use the specific piece of property that is mentioned in the document.
To ensure that the decedent can be buried in the correct location, the executor must often present the burial deed to the lot owners — usually a cemetery company or church, depending on where the lot is located.
If the deed is hidden away in a safe deposit box, the executor may have difficulty proving that the decedent had a right to be buried in the lot.
7. Firearms
Where to store instead: a childproof safe in your home
That old World War I pistol that belonged to your great-grandfather? It might be valuable as a collectible, but you should never put it in a safe deposit box. Most financial institutions have strict policies on what can and cannot be put in safe deposit boxes, and as a general rule firearms and other weapons are prohibited. Violating the financial institution’s policy could result in the institution voiding your rental agreement.
For firearms, the best policy is to purchase a home safe that can be locked and placed in a secure location. Gun safes come in a variety of shapes and sizes, and the safes can often be bolted directly into the wall to prevent them from being moved or stolen. Many companies also offer firearm insurance, so individuals who are trying to protect their firearms can seek out that option as well.
8. Advanced health care directives
Where to store instead: a fireproof safe in your home
One practice that is becoming increasingly common among older Americans is to draft a living will and health care proxy to state their wishes for end-of-life care. These documents, often referred to collectively as advanced health care directives, serve a unique purpose.
Living wills often describe the level of care an individual wants to receive before death. A health care proxy, also called a health care power of attorney, is a document that authorizes someone else to make medical decisions if the individual becomes incapacitated and can’t make decisions for themselves.
To be used properly, the documents must be available to health care providers. If the documents are locked away in a safe deposit box and not readily accessible, then the individual may not experience the end-of-life care that they had hoped to receive.
9. Power of attorney (POA)
Where to store instead: a fireproof safe in your home
As many individuals contemplate end-of-life care and the possibility of incapacitation, signing a power of attorney becomes a viable option.
A power of attorney is a written document that authorizes a person (usually referred to as the “agent”) to act on another individual’s behalf in the event that the individual becomes incapacitated.
If the document is hidden away in a safe deposit box, the agent will not be able to prove that they have been authorized to serve on behalf of the incapacitated individual. The best choice is to keep a copy of the document in an accessible location, like a locked filing cabinet in a home office.
A copy of the power of attorney should also be given to the person authorized to serve as the agent.
10. Spare keys
Where to store instead: with a neighbor, family member, or friend who lives nearby.
We all have extra keys that are only needed in moments of emergency. Spare house keys, car keys, keys to home safes and filing cabinets — we never need the keys unless we get locked out of the place or thing that we need to access.
So does it make sense to keep spare keys in the safe deposit box? No, it doesn’t.
Most financial institutions will only allow you to access your safe deposit box during normal operating hours — usually 8:00am to 5:00pm — so if you need to use your spare key before or after those hours, you’re out of luck.
And if you have an emergency and need to use the spare key right away, even accessing your safe deposit box during normal business hours will still take time.
For spare car keys or keys to home safes and filing cabinets, the best policy is to find a hidden, secure location to hide them within your home.
Spare house keys are a little different, as keeping them within your home would defeat the purpose of using them in the one situation where you need them — when you’re trying to get into your home.
Spare house keys should be given to a trusted neighbor or family member who lives nearby. That will allow you to use your spare key in the event that you’re ever locked out of your house.
11. Illegal items
Illicit drugs and other illegal items should never be put in a safe deposit box.
That might seem obvious, but you’d be surprised at the items that individuals have tried to keep in safe deposit boxes. Financial institutions directly prohibit storing any illegal items in the boxes, and you might find yourself on the wrong side of the law if you violate those policies.
If you aren’t sure of what is or is not allowed in a safe deposit box, read the fine print of the financial institution’s safe deposit box agreement. That agreement will tell you what items are allowed to be stored and what items are prohibited.
The bottom line
Although they should not be used to store all documents and items, safe deposit boxes can be a helpful asset in preventing the loss or theft of items that hold immense value or are difficult to replace.
Even if you do not have a safe deposit box, it is likely that you have a loved one who currently uses one. Understanding which items should go in a safe deposit box is an important first step in protecting your assets or the assets of a loved one.
