Bank safe deposit boxes are far from a sexy topic these days. But get this: no federal laws govern these so-called highly secure boxes. There are 25 million such boxes in the US and they operate in a legal gray zone despite the highly regulated banking industry, according to the NYT. If you or someone you know has a safe deposit box, please read on.
🔓 Banks generally don't carry insurance to cover losses to safe deposit box renters. Most safe deposit lease agreements deny any liability by the bank.
🔓 Banks often cause losses incurred by customers. When a bank closes or moves a branch, it will drill open the box. The contents are put in a cardboard box or an envelope which is brought to a new location.
🔓 A box will be drilled open when the bank loses contact with a customer.
🔓 If the rental fee isn’t paid on time, the bank might drill the box and put the contents in storage until someone claims the belongings.
🔓 If a bank is negligent and causes losses, it has no legal obligation to compensate its customers. Banks rarely have insurance covering losses of box contents.
So what should you do?
A safe deposit box often isn’t the best place to store important documents, such as a will, or other valuable items, like jewelry. In fact, it's becoming harder to rent a box because many banks are closing their branches and ending such deposit box services. For many banks, the service is also unprofitable.
If you want to share digital documents with your families such as wills, trusts, insurance health cards, passports, and tax returns, you're much better off with services such as Pillar, which acts as a digital vault. After all, we live in a digital age!