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Common and not so common questions about safe deposit boxes

People have been storing valuables in safe deposit boxes in bank vaults for probably as long as brick and mortar banks have existed. In an age of cryptocurrency and non-fungible tokens, is this still commonplace? Perhaps less so, but people still use safe deposit boxes. By some estimates, 25 million are leased in the U.S.

It is important to know that even if you own the contents, you don’t own the safe deposit box. Rather, the box is rented from the bank. The lease agreement between you and the bank includes important terms like those related to multiple signers and terms related to the bank’s liability, if any. As with any contract, carefully review the agreement before you sign it.

The contract will typically include an option for more than one person to be listed and have access. Read the options and terms carefully. There may be a box to check or a provision that defines joint lessors as “joint tenants with rights of survivorship.” For bank accounts, this language means that upon the death of one joint owner, the funds belong to the other joint owner(s). For safe deposit box leases, proceed with caution. The survivor may have a right to title and ownership of the contents, or only a right to continue to access the box. If the signers are spouses and the contents are considered their community property, the survivor likely owns the contents. However, for joint signers who are not spouses, whether or not the survivor owns the contents is unclear. Still, unless the contract says otherwise, the surviving joint signer does have a right to access and remove the contents.

Original documents like wills, stock certificates, deeds, family records, and life insurance policies are often kept in safe deposit boxes. It is generally okay to safekeep important documents at banks, but some are not good candidates for bank storage. For example, medical directives and powers of attorney should be readily available at the time they are needed.

If you decide to keep your original will in a safe deposit box, ensure that someone, whether a co-signer or the named executor, has authority to access it. After a person’s death, Texas law requires a bank to allow a co-signer, the surviving spouse, a parent, adult child or grandchild, or a person named as executor to examine the person’s safe deposit box. One of these individuals could remove and file the will with the court. If nobody has access and if the person named as executor doesn’t have a copy of the will, Texas law does provide a solution: The person can obtain a court order to force the bank to allow access. However, this is time-consuming and costly. It is far better to plan ahead. Understand the bank’s policies and have a plan to ensure someone you trust can access important documents upon your death or incapacity.

Tangible items stored in safe deposit boxes like jewelry, coins, photographs, military medals, and other collectibles may hold monetary or sentimental value, or both. If you decide to keep items in a safe deposit box, you should insure the valuables. While money deposits into bank accounts generally are FDIC insured, the FDIC does not insure safe deposit box contents. You should know the bank’s liability for lost, damaged, or stolen safe deposit boxes or their contents. For example, the bank could cap compensation for lost, stolen, or damaged items at a dollar amount, at 100 times the annual rent, or there could be no compensation at all.

You may visit our website at www.wrightabshire.com. Nothing contained in this publication should be considered as the rendering of legal advice to any person’s specific case but should be considered general information.