Having a safe deposit box vs having a safe at home to store your valuables

Attorney Tom Olsen: Holley, before the break, we were talking about safe deposit boxes. Specifically when we do estate planning for people, I just love it and clients love it too. We have an action plan.

Attorney Holley Knapik: Yes.

Tom: That when we meet with a client and they've retained us they will leave here with an action plan. That action plan tells them what we're going to do for them and what we're asking them to do.

Holley: Absolutely. Little homework on their part.

Tom: The homework is to help them to avoid probate, and that is make things simple, easy, inexpensive for their children when they pass away. One of the action plan items, if they have a safe deposit box, is either add a child's name to that box as a co-owner or get rid of it.

Holley: Indeed. One or the other.

Tom: What's your experience with clients when you tell them either add a child's name to it or get rid of it? Generally, what's their reaction? What are they going to do?

Holley: Typically, it brings them back to practicality. They say, we've had this box and the only thing in it is literally the deed from when they bought their first home. Mind you, they're on home number four now, or maybe it was the birth certificates at one point in time, but they realize, "Hey, wait, I have a safe in my house. A fireproof box in my house now, so I can move that. You know what? We're getting rid of it. We're shutting it down. Thank you." I think that is progression. Again, safe deposit boxes were just that. These safe metal boxes located in a bank and you could put your important paperwork or jewelry in, but now you can buy a safe inexpensively, have it in your home, garage, and do the same thing without the hassle.

Tom: You're right. That's a common response I get from clients is, "Oh, I have a safe at home. I'll just put my stuff in the safe." Now, occasionally I do get a client who says, "Tom, I do. I've got gold, diamonds, jewelry, and cash in the safe deposit box. There's a reason for me to have a safe deposit box." What we're asking them to do is add one or more of their children's names to that box as a co-owner and make sure that the child knows where a key to that box is.

Then I'm going to qualify it with this warning. That is this. Safe deposit boxes are like bank accounts. When you co-own a bank account with somebody and you pass away, the law presumes that that money belongs to the co-owner. If you've got three kids and you co-own it with just one of those kids and you pass away, the law presumes that the contents of that box belongs to that one child.

Holley: One child. Right.

Tom: Hopefully, they'll do the right thing and split up the gold, diamonds and cash, but no guarantee.

Holley: No.

Tom: If you really got something of value in your safe deposit box, we say add one or more of your children as a co-owner. The safest thing to do would be to add all of your kids as co-owners.

Holley: Co-owners, yes.

Tom: Then hope that they don't go in there and steal stuff out of your box while you're alive. I'm halfway joking and halfway serious.

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