How Safe Is Your Safe Deposit Box?
I previously asked if your deposits were safe at the bank. Now I am asking if your items in a safe deposit box are secure. When I ask that you may be wondering if I’m referring to theives, accidents or even natural disasters. But no, I am asking if your contents in the safe deposit box are safe from the State of California.
No that is not a typo. In California there is an Unclaimed Property Law that allows the State of California to . Specifically Section 1514 of the Code of Civil Procedure states:
1514. The contents of any safe deposit box or any other safekeeping repository, held in this state by a business association, escheat to this state if unclaimed by the owner for more than three years from the date on which the lease or rental period on the box or other repository expired, or from the date of termination of any agreement because of which the box or other repository was furnished to the owner without cost, whichever last occurs.
It would appear that your contents would be safe as long as your lease doesn’t run out or the agreement with the bank isn’t terminated. But this is not the case. California’s State Controller has been aggressive in the past seizing assets of deposit boxes which have not had any activity within the past 3 years. Even if no such termination occurred. In one case a couple of years back, a lady stored her grandmother’s jewelry and a file of personal documents at her bank, thinking they would be safe. Without giving her any notice and with no evidence she forgot about her stuff, the bank under the auspices ofthe State auctioned off the jewelry on Ebay for a fraction of the $80,000 value, and shredded everything else. She did not find out for another 9 years.
The state was racking up $400 million a year doing this. They were allowed to deposit these funds into a general account to use for various state expenses. Now, if the rightful owner ever comes around they can claim the property. There is a State Controlller’s page for information on unclaimed property. Because of the publicicty and a class action lawsuit, new laws were put in place and the State Controller implemented some reforms. They are attempting to increase their efforts in notifing owners of the imminent seizure of their assets, but it is still not perfect. Even celebrities from London are owed money from the program.
While you can rightfully claim any value of property they seized, it is not always easy to place a dollar value on assets now lost forever. The state is not in the business of storing mementos and stock certificats and jewelry. In previous cases they sold jewelry for a fraction of the real value, and that was all you were allowed to recover. Whether this practice has been eliminated is unclear. What is clear is that if you have a safe deposit box, check at least annually that your bank and the State have not decided on your behalf that you have abandoned it.
