You or your heirs could have trouble locking up important documents and valuables in bank vaults.
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It’s a digital universe, there is no doubt. Virtually everything that is important can be stored in the cloud. A physical safe deposit box is seen as a remnant of brick-and-mortar days. However, don’t forget the importance of keeping valuables safe in your bank vault.
You can store valuable possessions like baseball cards and jewelry that you have inherited from a relative in a safe deposit container. Important documents can also be protected by a safe deposit box.
A safe deposit box may not be the best choice for all your financial needs. Experts compiled a list of nine items you may regret keeping in your bank.
Your safe deposit box may not be accessible in an emergency, or during natural disasters, which could occur frequently depending on your location. A coronavirus pandemic also reduced the hours of operation at some banks and required appointments for services such as safe deposit boxes access. These moves can make it difficult to retrieve documents and other items you need when they are needed. Make sure to create a financial plan before you make any such move.
It may be tempting to wonder if cash can be safely stored in safe deposit boxes. Experts advise that you don’t keep cash in safe deposit boxes for several reasons.
You’re out luck if the bank is closed and you have to get money for an emergency.
Inflation can cause idle cash to lose its purchasing power over time. It is better to place the money in an interest-bearing certificate of deposit or account.
Some banks prohibit cash storage in safe deposit boxes. Check the fine print in your agreement.
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Your passport is not necessary for you to travel unless you are a global business executive, social media influencer, or a global business executive. It’s tempting to keep your passport safe in a safe place where it can’t be lost, stolen or damaged. Our advice? Don’t.
While a planned trip may be one thing, emergency trips are by nature unplanned and can occur during non-banking hours. It is possible for a student to get sick abroad, or for a parent to become incapacitated while on an international cruise. This can lead to a rush to leave the country.
You might be lucky enough to find a great deal on a last minute post-COVID European trip. Your bank won’t reopen until Monday because it’s Friday night after 5 p.m. If you keep your passport in your safe deposit, you’re out of luck. It is best to keep your passport safe at home.
Original Copy of Your Will
A safe deposit box is a smart idea to keep copies of your will, your spouse’s and any wills where you are named as the executor. The original will should not be stored there, especially if you are the only owner of the safe deposit. The bank will lock the safe deposit box after your death until the executor proves that he or she is legally authorized to access it. This could cause long, costly delays in the execution of your will and the distribution of your inheritances to your heirs.
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Keep the original will copy with your attorney, or in another location where executors can easily access it. Your executor may access it from another location without having to go through the legal hoops.
A smart estate planning move is to leave a letter of instructions that you can attach to your will. This letter can include details such as whether you would like to be cremated or burried and what type of memorial service you’d like. You can go as detailed as you like. A letter of instruction may also include specific bequests. Uncle Larry receives your Star Wars DVD collection, Cousin Kathleen inherits the pearl earrings, and so forth. Your final wishes may not be granted if the letter of instruction is kept in a safe deposit box that you cannot access.
Keep the instruction letter with your original will. Experts recommend that you send dated copies to all those who are to receive a particular bequest.
Durable Power of Attorney
You have been diligent about getting all necessary legal paperwork signed, sealed, and delivered. A Durable Power of Attorney is one of those documents. It gives you the authority to authorize a third party, in case you are unable or incapacitated to manage your financial and legal affairs.
But if the POA is kept in a safe deposit container that no one can access it, then the person who you rely on to protect your interests at times of need may be unable to reach it. Keep the original POA and the original copy your will. Give copies to anyone who might need them.
Advance Directives for Healthcare
Two documents are essential when it comes to estate planning or your health: a living will, and a proxy for health care. Although these documents are often referred to as “advance directives”, each one serves a specific purpose. The living will outlines your wishes regarding end-of life care. Do you want a ventilator? If your heart stops, do you want to be revived? Without a living will doctors have the obligation to take unusual (and sometimes unwelcome) measures to save you. A health care proxy (also known as a power of attorney) designates someone to make your medical decisions in the event that you are unable to do so.
You will not be able to access the documents if they are locked up in a safe deposit box. You should ensure that your family members, medical providers and the POA for health care have copies.
Uninsured Jewellery and Collectibles
You can use heirloom jewelry, wedding bands from your first marriage, and rare coins as safe deposit boxes. But only if you have proper insurance. The FDIC does not insure safe deposit boxes, nor does the bank unless it is specifically stated in the agreement. Wells Fargo, as an example, clearly states that the contents of safe deposit boxes are not insured and encourages owners to “purchase an appropriate insurance policy from the insurance company you choose.”
There have been notable disappearances of safe deposit banks, particularly after banks change owners multiple times. A safe deposit box owner had an amazing experience. He opened a box that he had kept for years and stored a valuable collection of watches. They vanished one day. The New York Times reported that the boxes were destroyed and stolen.
The worst thing to have in your wallet is a spare key. A spare key and the address on your driver’s license are open invitations for thieves to raid your home if your wallet is ever stolen or lost.
A safe deposit box should not be used to store a spare key to your house. However, this is not necessarily a bad idea. It’s a bad idea to keep a spare house key in a safe deposit box. You can only access your safe deposit box during banking hours, and only if the box’s keys are with you. If you are like most people, you have your safe deposit box key somewhere in your home. You can save yourself the hassle and give a spare key to a neighbor or relative.
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Liquids, Illegal or Dangerous Products
Your bank should provide a list of prohibited items to be kept in safe deposit boxes. Pay attention. Explosives and firearms are not allowed. Illicit drugs and hazardous materials are also prohibited. It is important to realize that anything illegal and dangerous is forbidden.
Be logical, but keep in mind that banks may have different rules. So make sure to read the fine print on your bank’s safe deposit boxes agreement.
Many people, if not all of them, don’t allow liquids to remain in safe deposit boxes. So that decades-old bottle from Scotch should stay at home.
Ask your banker if you are still unsure about what can be kept in safe deposit boxes.