You have a safety deposit box. Have you ever thought about what would happen if you were not around to access your box and your loved ones needed to get into it? Like many other assets, it depends upon the titling of the safety deposit box lease with the bank or other financial institution.
Upon Your Mental Disability. When the lease is in your sole name and you become mentally disabled, the persons whom you designate in a properly drafted durable financial power of attorney will have the authority to access the contents of your safety deposit box.
If you do not have a properly drafted durable financial power of attorney, your loved ones would have to petition the probate court to appoint a conservator. Your conservator would be able to handle all of your property and financial affairs, including the authority to access your safety deposit box. Some of the downsides of a conservatorship are lack of privacy, costly legal and court fees and having the probate judge in control of your assets.
On the other hand, if you have a co-lessee on the box, your co-lessee would continue to have access to the box during your mental disability. When your co -lessee is not around or not available, your agent under a financial power of attorney or conservator could access the box, but only in the presence of an authorized representative of the financial institution renting out the box. In that instance, a list of the items removed from the box is prepared, signed by all in attendance, and then served on all other co-lessees of the box.
An option for when you have a revocable living trust, is to have your trustee(s) of your trust be the lessor(s) of your box, if your financial institution allows it. Upon your mental disability, your successor trustees could then access the box.
After Your Death. There are similar and also different rules to access your safety deposit box after your death. If the box lease is in the name of your trust, your successor trustees would have full access to the box.
Similarly, if you have a co-lessee on the box, your co-lessee would continue to have full access to the box after your death. When your joint owner is not around or not available, your court appointed personal representative of your estate could access the box in the presence of an authorized financial institution representative, with a list of the items removed from the box served on all other co-lessees of the box.
When your box is in your sole name, and your survivors only want to access the box to get your will or burial plot deed, there are special court forms to use and a procedure to follow to access the box to retrieve the will and/or burial blot deed. See http://courts.mi.gov/Administration/SCAO/Forms/courtforms/estatestrusts/pc551.pdf for the form to access the box and http://courts.mi.gov/Administration/SCAO/Forms/courtforms/estatestrusts/pc552.pdf to report the contents.
If your box is leased in your sole name and your survivors know that the box contents, along with other assets in your sole name (other than certain titled vehicles), are valued in excess of $21,000 (in 2013), then your survivors would have to start a full blown probate proceeding in the probate court. The court appointed personal representative of your estate would then have the authority to access the box by presenting the court issued letters of authority to the financial institution.
When the value of the contents of the safety deposit box, together with all other assets in your sole name (other than certain titled vehicles), is known not to exceed $21,000 (in 2013), then your survivors could retrieve those assets from the box by presenting a properly completed Affidavit of Decedents Successor to the financial institution. The form can be found at http://courts.mi.gov/Administration/SCAO/Forms/courtforms/estatestrusts/pc598.pdf.
I know that there may be some financial institutions that are not familiar with the use of these Affidavits to access safe deposit boxes. I have researched Michigan statutes and case law and reviewed safety deposit box lease agreements. I have found that the access to the safety deposit box for small estates not exceeding $21,000 fits within the Affidavit statute, specifically MCL 700.3983-3984.
But what if your survivors do not know if the value of the contents of the safety deposit box, together with all other assets in your sole name (other than certain titled vehicles), exceeds $21,000 (in 2013)? I would advise your survivors to present the Affidavit to the financial institution anyway and have the contents of the box examined in the presence of an authorized representative of the financial institution.
If the contents of the safety deposit box, together with all other assets in your sole name (other than certain titled vehicles), exceeds $21,000 (in 2013), your survivors would not have any authority to remove the contents of the box, unless they were properly appointed by the probate court as personal representatives of your estate. If the value was not in excess of $21,000 (in 2013), your survivors would be entitled to the box contents and the financial institution could legally release them to your survivors.
Some Words to the Wise. When you have a safety deposit box, there are a few things that you may want do to make it easier for you or your loved ones in the event of your mental disability or death:
Keep your box number, location and key in a spot where they can be easily accessed, not necessarily in the same place; having a box drilled can be costly and time consuming.
Do not put important papers in your box if you or your loved ones may need them in a hurry, after-hours, on weekends or holidays, for example, your financial or health care powers of attorney.
When you have a trust, lease your box in the name of your trust if your financial institution allows it.
If you do not have a trust, you may want to consider naming a trustworthy co-lessee who could access your box in the event of your mental disability or death.
Remember that contents of your safety deposit boxes are not insured by the FDIC.
Keep up the payments on your box and notify the financial institution of any address changes.
If you empty your box, cancel your lease so your loved ones do not have to go through time consuming and costly procedures to access an empty box.
By: Matthew M. Wallace, CPA, JD
Published edited March 10, 2013 in The Times Herald newspaper, Port Huron, Michigan as: How do you get into the safety deposit box?