Topic: Safety Deposit Boxes
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One of our customers died in 2012. We have continued to withdraw automatic payments for the customer’s lockbox from his demand deposit account. Should we send the contents of the lockbox to the state, in addition to the deposit account funds? Can we use funds from the deposit account to pay to have the lockbox drilled and rekeyed? Our lockbox lease agreement allows us to sell the contents of a box and use any cash contents to offset any lease indebtedness.
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Yes, your bank should report and remit property held in the lockbox to the Illinois Treasurer, as required by the Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA). That law does provide your bank with the right to reimbursement of drilling and rekeying costs, but your bank must apply to the Illinois Treasurer for reimbursement…
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We are going through our list of inactive accounts under the new Illinois unclaimed property law. If a customer has an active safe deposit box account but has an inactive deposit account, can the deposit account be treated as active? Some of the customers with active safe deposit box accounts pay their leases with automated ACH payments, but we have a signature log showing that the customers accessed their boxes. Can we treat those as active?
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Yes, we believe that activity on safe deposit box accounts would constitute activity for a deposit account sharing the same “apparent owner” and mailing address at your bank. The Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA) provides that activity directed by an apparent owner for an account “shall be an indication of interest in…
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We have a customer who opened a safe deposit box in 2002 and stopped paying the rent in 2012, after which we had no more contact. The lease on the box expired in 2013. However, we have exercised a right of setoff in the customer’s deposit account to pay some of the past-due rental fees. Can we drill the box and remit the contents as unclaimed property?
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Yes, we believe that your bank may (and should) report and remit the safe deposit box property to the Treasurer’s office under the Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA). Generally, the Illinois RUUPA provides that safe deposit box property is considered unclaimed five years after the expiration of the lease or rental period…
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Under the new Illinois unclaimed property law, if a certificate of deposit (CD) customer also has an active safe deposit box, would the activity on the safe deposit box count as activity for the CD?
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Yes, we believe that activity on a safe deposit box would constitute activity on the CD sharing the same “apparent owner” and mailing address at your bank. The Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA) provides that activity “in any other account” at your institution counts as activity on an account to which Section…
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We plan to close the lobby at one of our branches but maintain drive-through services. What should we do about the safe deposit boxes at that branch? We plan to notify safe deposit box customers that the branch will be accessible only via the drive-through and that they can transfer their safe deposit box leases to one of our other locations. How much notice should we provide? What if a customer does not respond to our notice? When can we drill the box?
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We are not aware of any notice requirement for moving safe deposit boxes, unless there is an applicable provision included in your safe deposit box account agreement. Likewise, we are not aware of any law that directly addresses drilling a safe deposit box when the owner is alive and the account is current, which would…
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If one co-owner of a safe deposit box account passes away, can the executor of his estate access the box? Or does he need the permission of the surviving account owner? Our safe deposit box account agreements do not specifically include a right of survivorship, but after a co-lessee dies, we treat the survivor as the sole lessee of the box.
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In our view, the executor is entitled to access the box without the permission of the surviving co-lessee, provided that the executor presents the bank with letters of office, a small estate affidavit or an applicable court order, as required by the Safe Deposit Box Opening Act. We are aware that the surviving co-lessee could…
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We have several dormant safe deposit boxes, for which the lessors often are older customers. When can we treat these safe deposit boxes as active? Do the customers have to access the box physically to keep it active?
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No, customers do not need to access their safe deposit boxes physically in order to keep them active. The new Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA) provides several options for property owners to indicate an interest in their property. An “indication of interest” could include any written communication to the bank from the…
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A deceased customer’s family member would like to search her safe deposit box for a will. The family member has no keys, so we would have to drill the box. Do we need a court order to drill the box to search for a will?
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No, you do not need a court order to drill the box. Absent a court order, your bank should obtain a safety deposit box opening affidavit from the family member, who must satisfy certain requirements in the Illinois Safety Deposit Box Opening Act (the Act). The Act requires banks to open a safety deposit box…
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We inadvertently drilled the wrong safe deposit box. We have left the customer a phone message requesting them to contact us. We also have rekeyed the box and are holding the new keys under dual control for the customer. Is there anything else we do, such as prepare an explanatory letter? Do we face any legal ramifications?
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First, we believe you should document this situation, and we think it would be appropriate to do so in an explanatory letter that you send to your customer (a copy of which you should retain in a file created for the safe deposit box account). At a minimum, we would recommend that such a letter…
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Can you confirm that safe deposit boxes are subject to a five-year dormancy period under the new Illinois unclaimed property law, rather than the three-year dormancy period applied to most other types of property?
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Yes, the Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA) treats tangible property as abandoned five years after the expiration of the lease or rental period for the box. For resources related to our guidance, please see: Illinois RUUPA 765 ILCS 1026/15-205 (“Tangible property held in a safe-deposit box are presumed abandoned if the property remains…