Safe deposit boxes: A place for
some of your valuable stuff
By Michelle Samaad • Bankrate.com

It's midnight. Do you know where your most valuable documents are?

With fire licking at neighborhood homes, a monster hurricane or a plague of locusts bearing down, or a catastrophic illness hitting suddenly, it shouldn't be a guessing game to remember what documents were stashed in a plastic Zip-loc bag or where to find them.

Some experts say your home may in fact be the worst place to keep things such as birth certificates and deeds to property. One viable alternative is a safe-deposit box.

Most banks and credit unions offer safe-deposit boxes as a means of storing valuable papers, jewelry, rare coins and such. There are even private companies that rent out safe-deposit boxes for around-the-clock access -- and they're most easily found in the Yellow Pages.

Bankrate.com surveyed selected banks and credit unions and discovered that annual fees range from $20 for a safe-deposit box of 3 by 5 inches at Charter One Bank in Cleveland to $6,492 for a box 24 by 65 inches at Citibank in New York.

The hardware
When you rent a safe-deposit box, you sign an ownership card. The bank will also need the signature of anyone else who will have access to the box. Every time you visit the bank to open the box, your signature will be compared to the signature on the card.

It takes two keys to open the box: yours and the bank's. The bank doesn't keep a copy of your key, so if you lose it, the bank will have to drill the box open -- a service that could cost you hundreds of dollars. That's why it's important if you are the only person on the signature card to grant power of attorney to your executor so the box can be opened after you die. But don't keep the power of attorney documents in the box!

Make sure a family member knows where you keep the key to your safe-deposit box -- and which bank the box is in.

Suppose you need to get to your box at 2 a.m. because a relative needs quick emergency surgery and you don't have automatic 24-hour access? David P. McGuinn, president of Houston-based Safe Deposit Specialists, a consultant to banks and consumer groups, says policies vary with each bank. "Owners should get in writing specific instructions for after-hours access," he says.

The software
Make a list of what's in your box. Also list the names, numbers and details of all insurance policies, especially life, auto and homeowners policies. And don't forget health insurance and nursing home policies. Make a list of your doctors and their phone numbers. Once you've done all these things, make sure to tell your spouse, children or other relatives what you've done and where they can find all this information. Make copies of everything and keep them in a safe place.

What should typically go into a safe-deposit box? Experts say originals or even copies of documents, including:

• Birth certificates
• Adoption papers
• Deeds to property
• Mortgage notes
• Marriage licenses and divorce decrees
• Military discharge records
• Social Security cards
• Stock certificates, if your broker doesn't keep them for you
• Automobile titles
• Important computer disks

Other precious items might include rare photos, baby mementos, old love letters and other sentimental items stashed away for future generations.

Keep out of the box
What shouldn't be tucked away in a deposit box?

Anything you might need in an emergency, in case your bank is closed for the night, the weekend or a holiday (unless you have made special after-hours access arrangements)

Examples include:

• Originals of a power of attorney -- your written authorization for another person to transact business on your behalf
• Passports (in case of an emergency trip)
• Medical care directives if you become ill and incapacitated
• Funeral or burial instructions

And stashing things such as firearms, hazardous materials or drugs in a safe-deposit box is prohibited by law.

You might want to consider giving the originals of these documents to your attorney, and making copies to go in your safe-deposit box or even giving them to a close friend or relative.

Beware of merging or closing banks
Consumers should especially be careful if their financial institution merges with another: "That acquiring bank may not offer safe-deposit boxes and will sometimes leave it up to the consumer to retrieve the contents -- without any notification from the bank," says McGuinn.

When an insured bank or thrift closes, the Federal Deposit Insurance Corp. usually arranges for another institution to take it over, including the branches where you might have a safe deposit box. In those situations, you should be able to conduct business as usual.

If the FDIC cannot find a buyer for your bank, it arranges for you to remove the contents of your box so you can obtain a box at another institution, if you wish. This is done within a few days after the bank fails.

Finally, if you think you are automatically covered by the bank or vault company in the event your box is rifled or otherwise looted, guess again.

Unless you have specific coverage on your valuables, you could be completely out of luck. In case of a robbery or other catastrophe, the box renters must go to court to prove that operator was negligent in guarding the goods.

Insuring the contents
If you have a safe-deposit box, or are shopping for one, ask the operator what, if any, insurance coverage you are automatically entitled to as a box holder. Find out if you are covered as you enter or leave the premises with your goods. If no insurance is offered, ask if the operator has an affiliation with an insurer who can provide such coverage. But before buying any extra coverage, carefully review the policy and do some comparison-shopping.

Be certain to keep a receipt, appraisal or photo of every item you put in your box. Neglecting to do so could make all your insurance worthless when you try to make a claim. But don't keep the insurance policy in the box!

In the same vein, safe-deposit box owners need to be aware of the term "escheat." The word means: "Reverting of property to the lord of the manor (in feudal law), to the crown (in England) or to the government (in the United States) when there are no legal heirs," according to Webster's Dictionary.

In plain English: States can legally seize or escheat personal property, including safe-deposit boxes, bank accounts, stocks, bonds, insurance policies and mutual fund shares that are unclaimed.

States used to wait 15 years or so to glom onto those assets, but in recent years many have shortened that waiting period to only three or five years, according to the National Association of Unclaimed Property Administrators, a nonprofit organization based in Bismarck, N.D.

"Careful records and annual checkups are the key to keeping tabs on your valuables," says Valerie Jundt, executive director of the Association. It's vital not to let your box sit idly for years without paying the annual fees. And periodically check the box to make sure the contents are up to date, accurate and complete, she says.

-- Posted: Sept. 22, 1999