What Are New York State Laws Regarding Safe-Deposit Boxes of Deceased Individuals?

By Eric Novinson
Safe-deposit boxes store cash, stocks, bonds and other valuable items.

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Safe-deposit boxes store cash, stock and bond certificates and other items in banks. The bank typically rents these boxes out for a long period of time. The state of New York considers the contents of a safe-deposit box to be part of the estate of a deceased individual, or decedent, and has established laws that regulate disposition of the contents of the box. Contents may be subject to additional taxes and fees upon the death of the box owner.

Cash

Cash in a safe-deposit box is considered tangible personal property that exists separately from its owner. Tangible items have a physical presence. The cash is stored in a box in New York, so New York claims jurisdiction over it. According to the New York State Department of Taxation and Finance, the cash in the box is subject to the New York state estate tax, as well as the gift tax.

Financial Instruments

Financial instruments are not subject to these taxes. Stocks, bonds, notes and other items are considered intangible personal property. Intangible, or incorporeal, personal property includes documents that provide evidence that the decedent had an interest in an item, such as a real estate deed. According to the New York State Department of Taxation and Finance, transferring these incorporeal properties incurs a tax liability only when the property is used to run a business in New York.

Claiming Non-Residence

Estate beneficiaries can claim that they do not reside in New York and so are not required to pay taxes on certain property. The executor of an estate, family members of the deceased individual or another responsible person should fill out form ET-141. The responsible person lists the property the decedent owned in New York, including any safe-deposit boxes that the decedent rented. The form also asks whether anyone has recorded the contents of the box, as well as the name and address of the bank where the box is stored.

State Residents

If beneficiaries of an estate live in New York, they are subject to estate and gift taxes. The law that exempts residents of other states and countries from paying taxes on a decedent's financial instruments is designed to make New York more attractive to investors. According to the New York State Department of Taxation and Finance, the policy of exempting non-New York residents from these taxes was added to the New York state constitution in 1938.

About the Author

Eric Novinson has written articles on Daily Kos, his own blog and various other websites since 2006. He holds a Bachelor of Science in business administration from Humboldt State University.

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