Your Estate Plan and Your Safe Deposit Box

If you have an estate plan and a safe deposit box (SDB) you may be wondering one of two things. First, can (and should) you re-title your SDB in the name of your trust? Second, is your SDB a good place to keep your estate plan documents? This post will address both questions. 

Titling

If your financial institution allows you to title your SDB in the name of your trust, we recommend that you do so. Here’s why: having a SDB outside of your trust is the equivalent of having an account without beneficiaries, and often means probate court. Accordingly, even if someone else presently has access, you should consider retitling your SDB in the name of your trust.

First, if the other person with access is a co-owner, he or she is among those most likely to be involved in a common accident with you, if you are ever in one. If the co-owners are in a common accident and the SDB is not in trust, a probate estate must be opened in order for the trustee to gain access.

Second, if the other person with access to the box is a deputy (someone with access, but not ownership privileges), a probate estate will again need to be opened. A deputy on a SDB is akin to an agent under power of attorney – the privileges end at death. Therefore, if the owner of the SDB passes away leaving only a deputy with access, those access powers are extinguished and letters of authority from a judge in probate court are required for access.

On the other hand, if you title your SDB in the name of your trust, your named successor trustee immediately has access to the SDB upon presenting the most recent copy of your Certificate of Trust, and probate court is bypassed – often a key reason in setting up the trust in the first place.

Location

Generally, we advise against keeping your plan documents in your SDB for the reasons above. If the only or original copy of your estate plan is in your SDB (and your SDB is not titled in the name of your trust), there may be no one with access to the plan. In this case, a probate estate will need to be opened just to be able to access the SDB and the plan inside – which may have otherwise accomplished the very goal of avoiding probate.

Additionally, your estate plan is valuable to you and to your beneficiaries – it has little value to anyone else such as a thief who may break into your home. If you have a SDB, you should also check with your financial institution as to insurance coverage. You may be surprised to know that SDBs are usually insured for less than what it cost to have your plan drafted in the first place (though, your homeowner’s policy may cover the difference – be sure to check).

We generally recommend leaving your estate plan in a location that is still private, but is easily accessible to those you have named as your successors. Many use the file cabinet at home, or the place where bills are normally kept. You do not have to disclose your entire plan or provide copies, but be sure that your successors know that you have a plan and where they can find it when the time comes.

It would be remiss not to mention one notable exception to this rule, however. If your plan disinherits any who would otherwise be a beneficiary under the laws of intestacy, or limits the inheritance of any who would receive more under the laws of intestacy, you should think carefully about the location of your plan and to whom its whereabouts are known. To such an individual, your estate plan is more valuable out of the picture than in it (though they should beware of the potential for criminal prosecution, should they be caught). In this case, we recommend having multiple copies of your plan: be sure that one is easily accessible to your successors, and be sure that the other is in a location that is inaccessible to those who would benefit more from the laws of intestacy than they would from your plan. Typically, your SDB will fit the bill for the inaccessible location. Leave the original in the SDB (taking care to ensure that a photocopy of the Certificate of Trust is sufficient for the financial institution to allow your successor access to the SDB), and leave a second copy in a location that is more easily accessible.

If you have questions about titling your SDB or the best location for your estate plan documents, contact Mammel Law at 248-644-6326.