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All Contents © 2019The Kiplinger Washington Editors
By Bob Niedt, Online Editor
| September 28, 2018
As digital records and cloud storage become the norm, the stodgy safe deposit box is under threat to join our growing list of things that will soon disappear forever. “They’re probably going to be extinct at some point,” says Michele Awash, a certified financial planner with Family Office Solutions in Greenville, Del. “Everything is electronic these days.”
But don’t rush to declare the safe deposit box a relic of the past just yet. You still need to be able to produce certain original documents, rather than digital scans or photocopies, and some valuables simply can’t be digitized.
Installing a safe in your home is one alternative to a safe deposit box, but they aren’t foolproof, says Luke W. Reynolds, Chief of the FDIC's Community Outreach Section. Home safes are more susceptible to fire and water damage, not to mention theft, than bank safe deposit boxes, he says.
“Personally, I use both,” says William P. Simons IV, president and CEO of Rust Insurance Agency in Washington, D.C. Hard-to-replace items that Simons might need frequently, such as his passport, are kept in the home safe, while other important items he rarely needs stay in his safe deposit box. Here are 10 of the best things to keep in a safe deposit box at your bank.
Your Social Security number falling into the hands of an identity thief can be the start of years of headaches as you are forced to file disputes, freeze accounts and monitor credit reports for signs of financial fraud. It’s why we rank the Social Security card among the worst things to keep in your wallet in case it’s ever lost or stolen.
Stow your Social Security card in your safe deposit box. On the rare occasions when you actually might need to produce it, say, for a real estate closing, you can plan in advance to retrieve the card. Meantime, memorize the number, if you haven’t already, for filling out routine paperwork.
Vital records that are rarely needed but a hassle to replace are prime candidates for your safe deposit box. Think birth certificates, death certificates, marriage certificates and divorce certificates. Ditto for adoption-related documents; in particular, foreign birth certificates from an overseas adoption are extremely difficult to replace if lost or destroyed.
Government agencies typically can issue certified copies of vital records, but it’ll cost you time and money. You’ll also need to provide proof that you are entitled to copies. Virginia, for example, charges $12 per certified record, and it can take weeks to receive the document by mail. Expedited delivery through a third-party service called VitalChek takes just 2-5 days, but the charge is $20.80 per certified record, plus an $11.95 service fee. Overnight delivery costs an extra $18.50. VitalChek says it works with every state plus Puerto Rico and the District of Columbia.
Bookkeeping for stock and bond ownership and transactions is handled electronically these days, but there was a time when actual paper certificates were issued to investors. The New York Stock Exchange eliminated its requirement for physical certificates in 2001, and paper savings bonds haven’t been available from banks since 2011. In a twist, however, you can use your federal tax refund to purchase paper Series I U.S. Savings Bonds directly from the U.S. Treasury in $50 increments. Include IRS Form 8888 with your tax return to request the paper savings bonds.
Some paper certificates, many of which are intricately engraved, are still floating around. If you have any of your own or receive any as an inheritance, secure them in your safe deposit box until you can determine the actual value. This is especially true if you don’t recognize the name of the corporation on the certificate. The security could be worth more than you think if the stock later split or the original corporation merged with a bigger company. The SEC recommends contacting the transfer agent listed on the certificate for information. You can also try your broker or the relevant state agency that handles incorporations. Finally, even if you discover that the certificate has no investment value, it might be worth something as a collectible. Check Scripophily.com.
Gauge the sentimental value when deciding which personal papers to stash in your safe deposit box. Think things like diaries from your youth, cherished letters from friends and family members, or the unpublished memoir of a long-ago deceased relative. Yes, these personal papers can (and should) be scanned as a backup, but there’s no replacing the connection that comes with holding in your own hands something meaningful from your past.
“You really want to use a safety deposit for difficult-to-replace or irreplaceable documents,” says Rust Insurance Agency’s Simons.
It’s likely most of your recent photos are snug in the cloud, so your latest selfie is safe even if you lose your smartphone. But what about those precious old photos of, say, childhood vacations or relatives long gone? Much like personal papers, you’d be wise to store family photos with sentimental value in your safe deposit box, along with any negatives you may possess.
Don’t stop there. Scan the photos, copy them onto a thumb drive, and store that drive in your safe deposit box, too. Another backup option: Upload the digital copies to the cloud-storage solution of your choice. One of the membership benefits of Amazon Prime, for instance, is unlimited digital photo storage. If you own an Apple device, you get 5 gigabytes of iCloud storage for free, with the option to purchase additional space.
How often do you really look at that stamp collection your grandfather gave you as a child? Or the rare coins you collected in high school? Or how about your dad’s baseball cards including a signed Mickey Mantle? Probably infrequently.
Collectibles like these that are valuable and hard to replace are strong candidates for storage in a safe deposit box – but only if they’re insured. Neither your bank nor the FDIC insures your stored possessions, and the off-premises coverage provided by your homeowners insurance typically has very low limits for collectibles. One option? Contact your insurer to see if the coverage limits of your current policy can be raised.
As with collectibles, the standard coverage offered by your homeowners policy for jewelry stored in a safe deposit box will be modest at best. David H. Borg of the Borg & Borg Inc. insurance agency in Huntington, N.Y., recommends what’s called a personal articles floater. This supplemental policy provides added coverage for specified valuables. You’ll likely need to get written appraisals of the value of each piece of jewelry for insurance purposes.
Jewelry you wear regularly doesn't belong in a safe deposit box, which can only be accessed during a bank’s normal business hours. Keep expensive everyday jewelry in a secure place at home such as a safe. But the pricey heirloom jewelry that perhaps you inherited but rarely wear should stay in your safe deposit box until a special occasion arises.
Speaking of insurance, it’s a smart move to keep an inventory of all the belongings in your home safely tucked away in your safe deposit box. Should disaster ever strike, the home inventory will be invaluable when it comes to filing insurance claims. And, of course, a home inventory kept at home won’t do you much good if the house burns down or gets flattened by a tornado.
Another tip: Supplement your written inventory with visuals – the more detail the better. “Include photos/videos,” says Borg, the insurance agent, “as a picture is worth a thousand words.”
If you ever bought real estate, you’re familiar with the piles of paperwork that accompany the transaction. In general, it’s a good idea to keep these documents as long as you own the property and even beyond when you sell, though in truth you might never need any of them. But in the event you ever do, having the peace of mind that many years later you can track down a needed document in your safe deposit box is worth it.
Settlement documents including the closing statement detail how much you paid for the property. Some of these costs are deductible on your tax return, and proof of the purchase price is essential when you sell and need to calculate taxes on your profit. The original property survey can come in handy if a dispute ever arises with a neighbor over property lines. The deed showing property ownership is typically recorded by your local government and made available as a public record. If you can’t find a needed document related to a home purchase, try contacting your agent or the title company that handled the closing.
A vehicle title is rarely needed and a pain to replace; in other words, it’s a document that’s perfectly suited to be stored in your safe deposit box. The only time you’re likely to retrieve it is when you’re ready to sell the vehicle and literally sign over the title to the buyer. The only other time is if you decide to take out a short-term title loan, though in our opinion there are better ways to get extra cash than putting your car up for collateral.
A lost car title could require a visit to your state’s department of motor vehicles. There will be paperwork, a fee and perhaps a long wait time for your number to be called. If there are no liens and no changes to the title, you might be able to order a replacement copy online.