Many people lease safe deposit boxes from banks. Some choose to keep legal papers in the box, such as their birth certificates, marriage license, wills and property deeds. Others keep valuables, such as diamond jewelry, expensive watches and gold coins. But do you know what happens to the contents of your safe deposit box in the event of your death?

You may be surprised to learn that there is a box that must be checked on the Federal Estate Tax Return Form 706 if the decedent leased a safe deposit box. The contents of the box must be inventoried and verified by a bank officer and reported on the return.

Some choose to have spouses or children as co-signors on the box. A number of interesting Florida statutes govern the rules that we must all follow with safe deposit boxes. I thought that I might highlight a few of those rules in today’s column.

Florida Statute §655.935 contains the rules surrounding the search procedure upon the death of a lessee of a safe deposit box. The deceased’s personal representative, the spouse, parent or adult descendant may open and examine the contents of a safe deposit box in the presence of a bank officer. The bank officer must release the original will of the deceased if found in the box, the deed to a burial plot, or any insurance policy.

The personal representative of the estate has the ability to remove the contents of a safe deposit box. An inventory of the safe deposit box is filed with the probate court, and that inventory is signed not only by the personal representative, but also by a bank officer.

In cases where the safe deposit box is leased by two or more persons, then Florida Statute §655.937 applies. This statute provides that either of lessees may, at any time, access and remove the contents of the box. If you’ve named another person on your safe deposit box, you should then be aware that this person may remove the contents after your passing.

If the other party removes contents that should have been distributed to someone else, the statute specifically releases the bank (lessor) from liability for the joint party’s action. Therefore, it is important that you have confidence in the integrity of anyone you put jointly on your box.

The statute is somewhat ambiguous as to the inventory responsibilities of the joint lessee in the event of the death of a co-owner of the box. The law reads that after the death of one co owner, the other co owner may make a written inventory of the box. This implies the co owner is under no legal requirement to open an inventory the box. As I stated earlier, however, in the event of an estate where an estate tax return is due, it is likely that the box must be inventoried for tax purposes.

Some believe that they can avoid claiming valuables on their federal estate tax return by placing them in a safe deposit box and putting a co owner on the box. There may be several problems with this course of action. First, if the IRS suspects that there might be valuables not declared on the estate tax return, they may subpoena a copy of the deceased’s homeowner’s policy, looking for riders covering any such valuables.

Second, where the co owner of the box takes the valuables for him or herself, the IRS may treat that as a taxable gift. There’s always the danger that the co owner removes the valuables before the death of the other co owner, and does with them as he pleases.

The bottom line is that you should consult with your estate planning attorney when you have a safe deposit box that contains valuables.

©2009 Craig R. Hersch .Learn more at www.sbshlaw.com