Apr 22, 2008

Who Knew? Safe Deposit Boxes Aren't The Best Places to Leave Your Estate Plan

safe deposit box It might be a digital world, but your estate planning documents are still on paper, and you want to be sure that they stay safe and can be easily found when your family needs to find them. So, where should you store them? Probably not in a safe deposit box at the bank. First, it's probably not big enough. Old-fashioned wills were printed on paper that easily folded into thirds (and were wrapped in nice blue paper to boot) but these days, most wills and trusts come in three-ring binders that won't fit in the standard shoebox-sized deposit box. Second, unless your friends or family are co-owners of the box (and sometimes even if they are), it won't be easy for them to open it if you're not there. Having the key isn't enough to get the bank to open it up for them -- the bank wants you to prove that you have the legal authority to require them to open it up. Think about it: The document granting your friends or family the right to act on your behalf as an executor is INSIDE the box, and until the box is opened, they can't prove that they have the authority to get the bank to open it... (and so on). Some states, having given this almost Zen-like problem some legislative attention, have laws that require the bank to open the box in this situation, just to see if there's a will inside; in other states, it depends on the bank's policy. In still other states, when an owner of a safe deposit box dies, the box is sealed until the state figures out how much the contents are worth -- even if there are surviving co-owners. And third, there's those annoying, small keys to safeguard. Losing the keys to your safe deposit box is not a terrific idea. (I know that after two kids and five moves, I've lost mine.) Lost keys are an expensive proposition. When you rent a box from the bank, they give you two keys. The only way the box can be opened is when one of your keys and one from the bank are used at the same time. If you lose both of your keys, you have to pay the bank to drill out and replace the lock on the box -- about $150, depending on the bank. So, where else should you store your estate plan? There are people who store them in their freezers -- estate planners recognize their documents because they are fragile and cold. It's a better idea to keep your originals in a fire-resistant safe in your house and to notify friends and family where it is -- and how to get it open.

For a step-by-step guide to organizing your records and important paperwork, see Get It Together: Organize Your Records So Your Family Won't Have To, by Melanie Cullen and Shae Irving (Nolo).