Safe Deposit Boxes

Safe deposit boxes are an excellent way to ensure that valuable assets, such as cash, important documents, jewelry, etc. are secure. However, issues often arise following the death of the owner of such safe deposit boxes. This is because the safe deposit box is either titled improperly, or the owner’s estate planning documents do not adequately cover the asset. There are three common ways that safe deposit boxes are rented or titled. This article will provide some general information on how the safe deposit box can be properly planned for under each circumstance. Of course, we encourage you to consult with an experienced attorney about safe deposit boxes within the context of your overall estate plan.

Individual Title. Renting a safe deposit box in an individual’s name is the most common method of titling. This method of titling ensures that the owner is the only individual who has access to the safe deposit box during his or her lifetime. If this method is preferred, ensure that: (1) there is an estate plan in place; (2) the individual named as executor or trustee of your estate knows about the safe deposit box and its location (as well as that of the key, without which there will be the cost of drilling the box to open); and (3) if possible, make specific reference to the safe deposit box in your estate planning documents. This form of titling may subject the contents to probate.

Joint Title. Having another individual named as a joint holder of the safe deposit box is a convenient way to ensure that the joint holder has access to the asset following the owner’s death. However, there are certain disadvantages to titling the safe deposit box in this manner: (1) the joint holder will have unfettered access to the safe deposit box’s contents during the owner’s lifetime; (2) the joint holder may claim ownership of some contents or could simply disappear with the contents following the owner’s death, potentially derailing the owner’s intent; and (3) joint ownership may lead to estate and gift tax complications following the owner’s death. For these reasons, joint title is generally not preferred. If joint title is absolutely required, be sure that the joint holder is someone trustworthy.

Living (Revocable) Trust. The living trust (also referred to as a revocable trust) is an advanced estate planning technique that allows an individual to retain control of their assets while also avoiding the complications of probate following death. If the owner of a safe deposit box has established a living trust, the safe deposit box should be transferred to the living trust prior to the owner’s death. This strikes the perfect balance between control and ease of estate administration. Following the owner’s death, the successor trustee is obligated to administer all the trust assets according to the owner’s wishes—including the assets of the safe deposit box.