Safe Deposit Boxes Can Cause Problems After Death
By Michael J. Howell
I have discussed this issue several times in the past and during many, many office conferences with clients. Basically, unless you have valuables that must be stored in a lock box at a bank, we no longer recommend bank lock boxes.
As banks have become larger and larger, they have become harder and harder to deal with when a decedent has a bank safe deposit box, but all assets are in trust. Many banks are requiring Certificates of Appointment, Letters Testamentary, court order or similar documents, in order to surrender the contents of a safe deposit box, even if it was joint and there is a surviving spouse. This is so even if you can prove by a bill of sale or other documentation that you own the property in the box.
The concern of banks is that they may turn over valuable contents to the wrong party. For certain items such as Wills, life insurance policies and deeds to cemetery plots, they can turn these over to certain individuals upon proof of death and the relationship of the individual to the decedent.
For other items in the safe deposit box, it is not so easy. By requiring a Certificate of Appointment, Letters Testamentary or similar documents, they are asking for you to open up a probate estate and have a Personal Representative appointed. This can be an unnecessary multi-thousand dollar task.
So far we have been successful with surviving spouses getting into the safe deposit boxes and obtaining the contents. However, we had a close call recently, which prompted inclusion of this article.
In that case and others, the bank finally accepted the documents that we filed with the probate court to probate the Will, although no Personal Representative was actually appointed and there were no Certificates of Appointment or Letters Testamentary issued. Although it was a good result, it created needless stress on the surviving spouse.
Also keep in mind that probating the Will is not the expensive part of the process. It is the appointment of the Personal Representative, which requires administration of the estate through the probate court; albeit, possibly an abbreviated one.
So although the bank asked for the Certificate of Appointment, they accepted something else. Did they realize that what they accepted was not what they were asking for? Maybe, maybe not; but it was a reasonable result.
If the survivor is otherwise a signatory on the box, the bank procedures have prompted many customers to simply go into the box after the death of the co-tenant, empty the box and take the contents with them without raising the issue of the death. There are certainly a number of issues associated with this procedure, and these individuals should at least have an inventory of the contents of the safe deposit box in case questions come up later as to what was in the box.
In order to avoid the issues, you should not have a safe deposit box unless you have items such as valuable jewelry, gold, silver, etc. that need to be locked up and you do not have an adequate home safe. If you must have a safe deposit box at a bank, then place it in the name of your trusts.
If there is a husband and wife then put it in the name of both trusts. This keeps open the argument that the trust does not die, so there is no reason to seal the safe deposit box when a Trustee dies.
I hasten to add that this is a good argument, but may not work, if the bank wants to argue the point. Again, unless it is otherwise necessary to protect valuable property, we do not recommend the use of a bank safe deposit box.