A safety deposit box, or “safe deposit box” as it is sometimes called, is a locked box that is usually held by a bank in its secured vault. People usually have their safety deposit box in a bank, credit union, post office or other institution that offers the service of securely maintaining them.
Safe deposit boxes range in size from 2 x 5 inches to 10 x 15 inches. Larger boxes are also available. The institutions that offer safety deposit boxes charge a fee for their use. The fee depends on the size of the box but usually ranges from about $25 per year to $150 or more for a larger box.
A key is needed to open a safety deposit box. Often the bank or other institution that holds the box for a customer has a key as does the customer, and both keys must be used simultaneously to open the box. Of course, the box can only be accessed when the bank or other holder is open.
People commonly store items in safety deposit boxes when they want to be absolutely certain that the items are safe and cannot be stolen, damaged or destroyed. They are viewed as offering a degree of security that people feel they cannot achieve at home.
People use them to store their most possessions and documents, e.g. jewelry, coins or bars of precious metals, large amounts of cash, documents that represent ownership of stocks and bonds, wills, deeds to property, birth certificates and the like. A New York lawyer consultation would help a person understand safety deposit boxes and how they can be a part of a person’s financial and estate planning.
It is important to remember, however, that banks, credit unions and other financial institutions that may offer safety deposit boxes do not insure their contents. It is not required by either New York or federal safety deposit box laws.
The Federal Deposit Insurance Corporation (FDIC) does not insure the contents of safety deposit boxes. Of course, it does insure bank accounts up to a value of $250,000 per depositor. The National Credit Union Administration (NCUA) insures deposits at most credit unions, but, again, not the contents of safety deposit boxes.
The renter of a safety deposit box may purchase insurance that covers the contents of a safety deposit box in the event they are lost to flood, fire, theft or terrorist attacks. If the renter does decide to insure the contents of their box, they need to make a valuation of the contents so that they are sure to have the right amount of insurance coverage. Valuations should also be updated routinely. Professional appraisals may be needed for truly high value items.
A renter may wish to consult with an insurance broker or agent for advice regarding the valuation of the contents of their box and the amount of insurance they need.
Is It Illegal to Put Money in a Safe Deposit Box in New York?
It is not illegal to put currency, or cash, in a safe deposit box, but it may not be advisable. As noted above, the bank or other institution that holds the box does not insure its contents.
However, the FDIC and NCUA do insure bank accounts up to a value of $250,000 per depositor.
That is why it makes more sense for an individual to keep funds in an insured bank account. In addition, funds in savings and most other types of accounts earn interest, whereas cash in a safety deposit box does not earn any interest at all.
In New York, Who Can Access My Safe Deposit Box When I Die? Can the Government Access My Safe Deposit Box?
The renter has the right to access their safe deposit box. No one else can access it unless they have the express and explicit authorization of the renter. As noted above, banks enforce dual-control measures, i.e., the box can only be opened with both the bank key and the renter’s key used simultaneously. A bank employee must also be present during access to ensure proper documentation and procedures.
When the renter of a safety deposit box passes away in New York, the contents of the box become part of that person’s probate estate. The bank would not allow anyone to access the box until a person who has legal authority presents themselves.
This is most likely to be the personal representative, i.e. the executor or administrator, of the renter’s probate estate. Even this person would have to have proof of their legal status in order to gain entry, probably proof that they have been appointed as executor of the renter’s estate by the probate court.
In joint rental agreements, both renters are granted equal rights unless the agreement specifies otherwise. Clear contractual language is essential to avoid disputes between renters.
It is possible that a bank would seal a box and then require a court order before it would allow anyone to open it.
Unclaimed safe deposit boxes are handled according to the New York Abandoned Property Law. A box may take on unclaimed status, because the renter has not paid the rent or has not made contact with the bank for a long time.
The law prescribes a protocol for the bank to follow in these situations. After 5 years, it must send a notice to the last known address of the renter. If it does not receive a response from the rent, the bank may open the box. A notary public and a bank employee must be present when the box is opened.
The bank should then prepare an inventory of the contents and take steps to safeguard them. It then reports the unclaimed box and its contents to the New York State Comptroller. The Comptroller would hold the contents until the rightful owner appears to claim them.
It is possible that a government taxing agency could access the contents of a safety deposit box, but they would have to go through lengthy legal proceedings before they would be able to do so.
What If I, or Someone Else, Forgets about the Safe Deposit Box?
Again, as noted above, if a safe deposit box is not claimed by anyone, the contents are handed over to the New York State Comptroller. The rightful owner can claim them, if they should receive notice from the bank or otherwise recall that they have or had a safe deposit box.
What If My Safe Deposit Box Is Damaged or Stolen in New York? What If Its Contents Are Damaged or Stolen?
As noted above, the bank, credit union or other financial institution that holds the safety deposit box is not responsible for the contents unless it has been negligent in some manner. Their negligence would have to be the direct cause of any damage or theft. A New York lawyer would be able to explain the law of negligence and how it might apply to the loss of contents of a safety deposit box.
This is why financial professionals advise renters to purchase insurance to cover the contents of a safety deposit box.
Do I Need a New York Lawyer for Help with My Safe Deposit Box?
If you have a safety deposit box, you want to contact a New York financial lawyer. Your lawyer can review New York law with you. If you have a relative who may have left a box that you know about with no will, you definitely want to talk to a New York financial lawyer about what you will have to do to gain access to the box and start the probate of your relative’s estate.
While renting a safety deposit box may seem straightforward, the situation for you or your relatives may quickly become complicated if a family member leaves a box without instructions or a will. Your lawyer will be able to guide you through untangling the complexities to the solutions that work for you.
