Survivorship Rights in a Safe Deposit Box

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Estate Planning LawyerAs an Estate Planning attorney in Chandler, Arizona we get questions about Safe Deposit Boxes from our clients all the time.

Safekeeping of valuable personal effects and important documents in a safe deposit box is a common practice for many. The arrangement protects the items from theft, fire, or other disasters more likely in one’s home. In addition to individuals and spouses leasing a box from their local bank, unrelated parties also jointly lease safe deposit boxes for safekeeping of valuables. Multi-party lease arrangements enable people with mobility issues to safe keep their valuables while offering the convenience of a trusted friend or relative to manage the contents of the box on their behalf. However, multi-party lease arrangements can also give rise to questions of ownership of safe deposit box contents, especially when one of the parties to the lease agreement dies.

Arizona Revised Statute § 6-1004 authorizes joint tenancy leases in safe deposit boxes. The statute provides that the lease will survive the passing of any single lessee in a multi-party lease arrangement and access to the contents of the box will remain unfettered for survivors. However, the statute does not speak to ownership of a deceased lessee’s contents in a safe deposit box. Accordingly, absent a written agreement declaring who owns the contents of a box, a multi-party lease of a box may give rise to arguments and litigation.

While there is limited case history in Arizona, other states have grappled with this issue and the conclusions of other courts are relatively consistent. Most courts conclude a multi-party lease in a safe deposit box only grants rights to access the box and its contents. These courts consistently hold that access to a box’s contents does not create any ownership rights in those contents. So if one of the parties to a safe deposit lease passes, then that decedent’s estate, and not the surviving lessees, becomes the owner of the decedent’s contents stowed in the box.

There are cases where Arizona courts allowed people to use a safe deposit box to transfer title to contents they stow inside. These courts required the survivor claiming title to produce unambiguous evidence of intent by all the lessees of the box to create survivorship rights in the box’s contents. However, without carefully creating this evidence in the safe deposit box lease agreement itself, parties may find it difficult to prove their intent to create these rights to a court.

We do not recommend joint tenancy in safe deposit box contents as a form of estate planning. But for those clients who desire such an arrangement, we advise them to consult with an attorney before leasing the box. The attorney can work with the bank to draft language in the safe deposit box lease agreement that creates survivors’ rights in the box’s contents from the outset. If parties have already leased a box using a bank’s standard lease agreement form, we advise them to take out a new lease in a different box, incorporate their attorney’s language in the lease agreement to provide for survivors’ rights in box contents, and transferring the contents of the existing box to the new box. Taking the time to do this now can minimize conflicts in the future, help to preserve the intentions of joint lessees who place property in a safe deposit box, and maintain relations among family members who might otherwise claim safe deposit box property owned by a decedent’s estate.

Thanks to our friends and contributors from Citadel Law Firm for their insight into estate planning.