In life, there will be…paperwork! Lots and lots of paperwork — a Social Security card, insurance policies, a will or trust. You probably realize that keeping such documents in a shoe box underneath your bed isn’t the best idea. But where should you keep them? How do you keep them safe, yet accessible?
There is no single right answer to those questions. You will have to weigh cost and convenience factors, and how comfortable you are with the safety and accessibility provided by the storage system you choose. The following suggestions are designed to help you make good decisions based on your needs and circumstances.
A safe deposit box
Does this feel like a relic from your grandparents’ day, as quaint and outdated as keeping money in cookie jars to save for certain expenses?
In fact, the popularity of safe deposit boxes has been in slow decline for the past decade. Some banks, such as Chase and Capital One, no longer offer them to new customers. However, safe deposit boxes can still be found at many banks, credit unions, and even private companies, and they can still play an important role in safeguarding your essential documents and valuables.
Ideal items to store in these lock boxes include items you do not need to access quickly or frequently, such as:
Birth certificates
Marriage certificate
Adoption papers
Death certificates
Citizenship papers
The deed to your home or car
Copies of your will or trust (not originals, as there may be a delay in granting your executor access to the box)
Diplomas and baptism certificates
Military records, such as discharge papers
Paper stock certificates or bonds
Business contracts
Thumb drives containing pictures or videos of your home inventory (for insurance purposes), although storing them “in the cloud” is probably sufficient
Gold, silver, or other hard assets
Valuable jewelry you rarely wear
Collectibles, such as a stamp or coin collection
Family heirlooms, originals of family photos, or other irreplaceable items of sentimental value
Safe deposit box considerations
The average rental cost of a safe deposit box ranges from $40 per year to several hundred dollars, depending on the bank and the size of the box.
But sure to maintain an inventory of what’s in your deposit box and share that information with loved ones and your executor.
Someone else should have access to the box. You can accomplish this through a “joint rental” in which your spouse is on the agreement, and through a power of attorney document that mentions the safe deposit box and grants your agent access.
Bear in mind that items stored in a safe deposit box, even though housed at a bank, are not covered by FDIC insurance. Be sure to cover any valuables through your homeowner’s policy.
Also, be aware that despite the name, safe deposit boxes are not completely fail-safe. There have been (rare) occurrences where a bank was damaged or destroyed in a flood or other natural disaster and the contents of safe deposit boxes were lost.
Regarding gold or other hard assets, you may be more comfortable keeping such items in a home safe for ease of access, although that probably depends on how much of the asset you own.
A home safe
Ideal items to keep under lock and key in your home include important papers and valuables that you may need or want to access easily, such as:
Social Security cards
Passports
Originals of your will or trust
Valuable jewelry you wear often
Receipts for items under warranty
Home safe considerations
Home safes can cost less than $100 to several thousand dollars, depending on the size, strength, and brand.
You may opt for a traditional safe or a lockable grab-and-go box. A safe is more secure, since it’s typically heavier and you could bolt it to the floor. However, if your area is prone to wildfires or other natural disasters, being able to easily grab your important items may be more beneficial. You may want to keep some items in a safe and others in a grab-and-go box.
Maintain an inventory of what’s in your safe and share that information with loved ones and your executor.
Make sure your spouse and executor have access to the safe. Give them the combination or keys and let your executor know where you keep your safe.
Why not just digitize what you can?
One reason for the decline in the use of safe deposit boxes is the increased use of document digitization.
Electronic record-keeping can be a space saver, and you should be fine maintaining digital-only copies of insurance policies, past tax returns, and medical records. For everything else listed above, you would be wise to keep the originals.
