Safe Deposit Boxes
You have probably heard that a safe deposit box is “sealed” when the owner dies. This is not true in Pennsylvania. Safe deposit boxes are not sealed. In fact, the box is the safest place for your will, life insurance policies, stock certificates, and other valuables. Far from being sealed, the box is opened, following proper procedures, to search for documents that are needed at the time of death.
I always recommend that clients keep their wills in the safe deposit box. Wills kept at home often get lost, misplaced, or accidentally destroyed. It is not easy to probate a copy – a lost will is presumed to have been destroyed with the intention of revoking it. In this age of photocopies, a will is one document where the original is the only one that counts.
Sometimes wills “disappear” when they are found by a beneficiary who doesn’t like what they say. Sometimes they are hidden in a “safe place” and are never found. Don’t place all your trust in “fire-proof” boxes either. Most of these are fire-rated for only one to three hours. Paper inside the box will ignite at about 451 degrees (according to Ray Bradbury). The fire rating makes assumptions about the fuel causing the blaze and thus the temperature outside the box. If your will is in a safe deposit box, you don’t have to worry about the assumptions used to rate a “fire-proof box”.
There are some restrictions on entry into a safe deposit box in the decedent’s name. The purpose of the restrictions is to prevent inheritance tax evasion. If unreported cash, jewelry, bearer bonds, or other valuables are stored in the box, the Commonwealth wants to make sure that these items are reported and that inheritance tax is paid on them.
Nevertheless, banks recognize the right of the family, next of kin or Executor (if known), to search the contents of a decedent’s safe deposit box for wills, codicils, trusts, life insurance policies, and cemetery deeds. If the key cannot be found, the box can be drilled. The law permits removal of such documents provided a bank employee certifies that no other assets have been removed. It is worth noting that the bank is entitled to demand that wills or other documents remain in their custody until lodged with the Register of Wills, though they seldom insist on this.
The restrictions on entry apply to a safe deposit box that is “in the decedent’s name.” A safe deposit box is considered to be “in the decedent’s name” if it is (1) registered in the decedent’s name alone, (2) registered jointly in name of decedent and one or more others (except husband and wife), or (3) registered in a partnership or trade name where decedent had access to the box, as principal agent or deputy.
For example, a box held jointly with the decedent and the decedent’s son is a box “in the decedent’s name.” A box held in the name of the XYZ partnership where the decedent had the right of entry to the box is also “in the decedent’s name.” This is important to note: a box held jointly by the decedent and the decedent’s surviving spouse is not “in the decedent’s name.”
“In the decedent’s name” is a term defined in the Pennsylvania state statute. It seems odd but a box in the joint names of the decedent and a spouse is not “in the decedent’s name,” while a joint box in the names of the decedent and any other person is “in the decedent’s name.”
None of the restrictions on access is applicable to boxes registered in the name of decedent and spouse. In that case, decedent’s surviving spouse, or the surviving spouse’s deputy, may enter the box and remove anything with no restriction whatsoever.
The procedure for inventorying and closing a safe deposit box after death changed on May 11, 2011. The Department of Revenue no longer requires a department or bank employee, lawyer or CPA to be present at a safe deposit box inventory. Instead, the requirement is that notice of a proposed safe deposit box entry and inventory must be delivered to the PA Department of Revenue via Certified Mail with return receipt service by the fiduciary responsible for PA Probate at least seven (7) days in advance of entering the box.
The Executor (or Administrator if there is no will) is then able to give a signed statement that he or someone on his behalf has given the proper notice required, to the financial institution where the box is located, at the date and time of entry of the box.
Once the financial institution receives this notice, they are then required to permit the Executor or a person acting under a limited power of attorney for the Executor, to enter and remove the contents of the box without the presence of a department or bank employee.
Within 20 days of entry, the estate representative must complete and return a REV-485 (Safe Deposit Inventory Form) to the PA Department of Revenue.
Subsequent entries by the executor or surviving joint owner are free of restriction.
Inventorying the safe deposit box is always part of the estate settlement process. Since the safe deposit box is probably the “safest” place, please consider keeping your will and other valuable papers there.
Procedure for entry
“In the decedent’s name”
Safe deposit box versus fire poof box