Safe deposit boxes are often viewed as the safest way to store your most valuable possessions. Movies and television shows have shown us that safe deposit boxes are stored in large vaults and require two keys and two parties to open. Superficially, this method of storage seems to be an efficient way of ensuring that possessions remain safe, but unfortunately, this is not the case. The law behind safe deposit boxes is murky and has little to no federal oversight. The Office of the Comptroller of the Currency is the banking industry’s main federal overseer but this organization has no grounds to get involved with actions regarding safe deposit boxes. Although there is no formal process of tracking customer losses in safe deposit boxes, there are an estimated 33,000 incidents a year involving safe deposit boxes. Customers complain of missing items or have their safe deposit boxes emptied out in error by the banks themselves. The banks that have been charged with the protection of the safe deposit box can often be the culprit behind these incidents. Frequently, once a bank realizes that something has been stolen, or that they have made an error, they do little to nothing to reimburse customers, even when the fault lies solely with them. Banks will also include in their safe deposit contracts language stating that they are not liable for any stolen or damaged goods, and they put a low cap on liability recovery amounts. Banks have the resources to bury customers in litigation, leaving the safe deposit box owner without compensation for their missing goods, and with substantial legal fees from drawn out litigation. The New York Times article, Safe Deposit Boxes Aren’t Safe, describes the issues surrounding keeping items in a safe deposit box, and the devastating losses that people have suffered without compensation.

Interestingly, another issue that arises with safe deposit boxes is confusion over ownership of the possessions once the original owner has passed away. If there is a joint owner on the box, bank policy, rather than the original owner’s intent, governs whether the ownership of the box passes to the joint owner or to the original owner’s estate.  This can lead to unintended consequences where a joint owner may have the authority to take ownership of the box contents upon the original owner’s death.  It is best to consider and handle these issues through a well-structured estate plan.

If you have any questions related to this topic and how it may affect you, our Estate Planning Department may be able to help. To reach one of our Estate Planning attorneys please call our office at 617-951-3100.