Creating a well thought out estate plan is the first step toward ensuring that your loved ones will be secure after you are gone. For you plan to work as anticipated though, the individual documents that make up the plan must be accessible and work as intended. To help you keep your estate plan safe and ready when needed, let’s explore what to do with your estate plan when it’s complete.
What’s In Your Estate Plan?
Of course, no two estate plans are identical because people have unique needs and goals; however, there are some common needs and goals found in the average estate plan. Likewise, there are some documents that are routinely part of a comprehensive estate plan, including:
- Last Will and Testament
- Trust agreement
- Letter of Instruction
- Power of attorney
- Life insurance policy
- Advance directive
With many of these common documents, an original copy (meaning one with an original signature in ink) of the document will be required when it comes time to put the document to use. For this reason, your estate planning documents should be kept together in a safe place. When you think about where to store your document, one of the first places that comes to mind is probably your existing safety deposit box. If you are like most people, you safety deposit box is probably where you keep valuable jewelry, deeds to property, stocks and bonds, and other valuables. Given the importance of your estate planning documents, it makes perfect sense to put them in your safety deposit box along with those other valuables. Before you do that though, you need to understand how putting your estate planning documents in your safety deposit box could completely derail your estate plan.
What About a Safe Deposit Box?
Although it may be the perfect place for other valuables, putting your estate planning documents in your safe deposit box may not always be the best choice. To understand why that is, you need to understand some probate basics. Probate is the legal process that must occur after the death of an individual. Among the numerous functions of probate are:
- Identifying and securing your assets
- Authenticating your Will
- Paying debts of the estate
- Litigating any claims against the estate
- Paying estate taxes
- Distributing assets to beneficiaries and/or heirs
In your Last Will and Testament you appointed someone to be the Executor of your estate, meaning that he or she is responsible for overseeing the probate process. To perform that job as intended, your appointed Executor must initiate the probate process with appropriate court and petition the court to officially be appointed as your Executor. If the court approves the appointment, the court will issue Letters Testamentary which provide proof that the Executor has been appointed by the court and therefore has the authority to act on behalf of the estate.
Here’s where the problem starts if your Will is in your safe deposit box. To initiate the probate process and secure the appointment as your Executor, an original copy of your Will must be submitted to the court. If your Will is in your safe deposit box, however, the bank won’t allow access to the box without proof that the individual seeking access is the Executor of your estate. This becomes a “chicken and egg” problem. Your chosen Executor cannot secure the necessary Letters Testamentary to act as your Executor without your Will – but he/she cannot access your Will without the Letters Testamentary.
Similar problems can crop up with other estate planning documents as well. For example, an Agent with your Power of Attorney may have the legal authority necessary to access your safety deposit box; however, if the POA document granting your Agent that authority is in the box, your Agent has no way to prove that he/she is your Agent.
The smart way around these issues is to make sure your designated agents are listed as permitted persons to access your box on the bank’s signature card and that they also know where you keep your safe deposit box key.
What Should I Do with My Estate Planning Documents?
Now that you understand why your safety deposit box may not be the best place to keep your estate planning documents, the question becomes “where should I keep them?” As an alternative to using a safe deposit box, your original signed documents can be kept at home in a fireproof safe.
Once again, it is important that your designated agents know where the safe is located and have the combination and/or keys to open the safe when the need arises.
Please download our FREE estate planning checklist. If you have additional questions or concerns about what to do with your estate plan once it’s complete, contact us at the Northern California Center for Estate Planning & Elder Law by calling (916)-437-3500 or by filling out our online contact form.