A safe deposit box is more commonly referred to as a safety deposit box. A safety deposit box is a secure, individual container that is generally metal, and remains inside the vault or safe of a federally insured bank. Some credit unions also maintain such vaults or safes. Safety deposit boxes are private boxes generally used to store valuable or otherwise important items.
Some examples of items and assets that are commonly stored in a safe deposit box include:
- Documents that do not require immediate access;
- Property deeds, or other legal documents related to a property;
- Personal papers, such as birth certificates, marriage licenses, etc;
- Collections, such as stamps or coins;
- Rare collectibles;
- Other important business documents; and
- Anything else that would be difficult or impossible to replace, should it be damaged or stolen.
Each individual bank may place some limitations on what can be put in a safe deposit box. Such limitations are generally based on the value of the items being stored. Other restrictions involve storing explosives, as well as anything illegal.
Some examples of what should not be stored in a safe deposit box include:
- Medical directives;
- Revocable living wills; and
- Anything that would need to be quickly accessed in an emergency, or by someone other than the owner of the safety deposit box.
Is It Illegal to Put Money in a Safe Deposit Box?
There are no federal laws concerning safe deposit boxes. As such, there are very few protections for those who have their property stolen or destroyed. Keeping cash in a safety deposit box is not technically illegal. However, it is not advised for the above aforementioned reasons.
Additionally, putting money in a safe deposit box could have the appearance that you are trying to hide that money from the IRS. It is for these reasons that many banks have instituted their own rules against the practice of putting money in a safe deposit box. Some banks may also have their own set of rules concerning other items that may be limited from being kept in a safety deposit box, including a large amount of money, a large amount of gift cards or other form of prepaid debit cards, and/or a large amount of jewels.
As can be seen, banks are most reluctant to keep products stored in safety deposit boxes that may open them up to future liability. For example, if an individual brings in 50 prepaid debit cards and wishes to store them in a safety deposit box, the bank will typically require to know the amount stored on the prepaid debit cards, and may deny the application for the safety deposit box based on the liability if the amount is significant.
Another example is an individual bringing in a bag of diamonds worth millions of dollars, and wishing to store them at the local bank in their town. That local bank may choose to deny their application, or allow the individual to store the valuables, because they may have to increase their security or obtain a new insurance policy to cover the valuables.
For this reason, individuals that have expensive valuables may have to go to a facility that can accommodate the value of their items. Such facilities will typically have a higher level of security in accessing safety deposit boxes, as well as a much larger insurance policy that could cover them should something happen to the valuables being stored in their facility. Additionally, the large facility will also have a legal team that can help them review their policies concerning expensive items being stored at their facility, as well as assist them with any claims being made for those valuables.
For instance, if grandparents have expensive valuables held in a safety deposit box, and grandparents pass away with no will, then grandparents’ surviving heirs may be fighting over who receives the valuables. In such a case, the bank may be implicated in the probate procedures initiated by the local court.
Who Can Access My Safe Deposit Box When I Die? Can the Government Access My Safe Deposit Box?
Some states maintain laws permitting certain people to access your safe deposit box when you die. Other states will require that your family obtain a court order in order to open your safe deposit box. Some states allow family members, or a person you have named as your executor, to oversee your personal matters when you die. The person you name may have access to your safe deposit box after death in order to obtain your will, as well as other relevant documents.
Government regulatory or enforcement agencies may obtain a court order to access your safe deposit box in some circumstances. An example of this would be if they have “reasonable cause” to believe your box contains illegal or illegally-obtained items. Safe deposit boxes may be frozen, similar to a bank account, until the matter has been resolved.
What If I, or Someone Else, Forgets about the Safe Deposit Box?
As previously mentioned, safety deposit boxes are considered to be a gray area of the law, as there is no federal governance. Safe deposit box policy and procedures are generally determined by the bank who is facilitating the boxes.
In the event the box is forgotten about, or lost, most states will allow the bank to surrender the box’s contents to the government. This is to be done when a specific amount of time has passed, and the rental fee associated with the box has not been paid.
If you discover that your safety deposit box has been turned over to the government, or you have inherited a decedent’s box, you will need to contact your state’s unclaimed property office. From there you may retrieve what was contained in the box.
What If My Safe Deposit Box, or Its Contents, Is Damaged or Stolen?
It is important to note that, unlike money that is deposited into a standard bank account, items that are deposited into a safe deposit box are not guaranteed by the government. The bank cannot be held responsible for anything that may happen to your safety deposit box, nor the items contained within the box. The exception to this would be if the bank or its employees are found to have been negligent when handling the box, or the box’s contents.
Do I Need a Lawyer?
If you are experiencing issues related to a safe deposit box, you should consult with an experienced and local financial lawyer. To reiterate, safe deposit boxes are not federally regulated. As such, they are subject to state laws as well as the regulations put in place by the box’s facilitator. An experienced and local financial attorney will be best suited to helping you understand your state’s specific laws regarding the matter.
A financial lawyer can help you gain access to a forgotten or abandoned safe deposit box. If you believe your box has been unfairly frozen by the government, your attorney can help you through the process of regaining possession.
Should the bank lose or destroy the contents of your safe deposit box, an attorney can guide you through the process of suing them for negligence or breach of contract. Finally, an attorney can also represent you in court, as needed.