Hidden Assets
Most investors will entrust their money to a financial institution like a bank or a credit union without a second thought: Banks can provide easy liquidity (via checks, debit cards or cash withdrawals), security, the potential for account growth through interest and even a federally guaranteed insurance policy (up to a certain amount) in the case of theft or dissolution. Yet despite all these advantages, some people – particularly seniors – choose to forgo the bank and hide their money somewhere in the house. And it happens more often than you might think: According to a 2019 MetLife poll, 17% of U.S. adults admit to hiding cash in their homes.*
The question is why – why keep your money stashed in your house, where it can be more easily stolen or lost? The answer is complicated, and can be attributed to a variety of reasons rooted in personal, cultural and historical contexts. Understanding this behavior requires a deep dive into the elderly’s experiences, technological barriers, cultural influences and emotional attachments.
Understanding Seniors’ Perspective
To understand the behavior of seniors, it helps to understand their life experiences. Many of today’s elderly either lived through or were raised by parents who experienced the Great Depression of the 1930s – a time when bank failures were as common as they were financially devastating. The memory of waves of financial institutions collapsing and ordinary people losing their life savings has been passed down throughout the generations, instilling a deep-seated wariness of banks. (This wariness was only reinforced by the string of bank failures in 2023, highlighted by the collapses of Silicon Valley Bank and Signature Bank.) For many seniors, these historical experiences have shaped their attitudes toward financial institutions, leading them to believe that it is safer to have their money within reach.
These feelings can be especially acute during periods of political upheaval or economic instability. In such times, seniors may have learned to rely on tangible assets like cash or precious metals that can be stored in their homes. These assets are seen as a hedge against potential financial disruptions or losses that could occur if banks were to fail or if there were restrictions on accessing funds.
A Reluctance To Trust
Trust in financial institutions is critical to any banking relationship. Some seniors may be more skeptical of modern banking practices, particularly digital banking, due to an unfamiliarity with technology or concerns about cybersecurity. They may feel more comfortable with traditional methods of managing money, such as keeping cash hidden at home where they can physically monitor their savings.
Accessibility
Practical, real-life considerations can also influence seniors’ decisions to keep money at home. While a bank can provide easy access to savings, it’s not as easy as cash on-hand, and having cash readily available can be useful for everyday expenses or emergencies. Seniors may prioritize liquidity and immediate access to funds over interest earnings or investment returns offered by banks. This is especially true for seniors living in rural or remote areas, who may face limited access to brick-and-mortar banking services – it may be more practical for these individuals to rely on cash transactions. Physical distance from bank branches and limited transportation options can also contribute to the preference for keeping money at home.
17%
According to a 2019 MetLife poll, 17% of U.S. adults admit to hiding cash in their homes.
Cultural and Generational Considerations
Cultural and generational norms can also play a significant role in shaping attitudes toward money management. In some cultures, the tradition of saving and storing money at home is deeply rooted in historical practices or even religious beliefs. Seniors may adhere to these traditions as a way of preserving cultural heritage or passing down these traditions to younger generations.
Additionally, generational habits and experiences inform beliefs when it comes to financial security and risk management. Seniors who grew up during periods of economic hardship or scarcity may be more inclined to prioritize physical assets like cash as a form of financial resilience and preparedness for unforeseen circumstances.
This issue becomes even more complicated when viewed through the lens of communities of color. For decades in the not-so-distant past, entire minority communities did not have access to reputable financial institutions and banks. Even those in these communities that did have access had their experiences marred by financial abuse and dishonesty on the part of the financial institutions themselves. These negative experiences created a sense of mistrust and led to families in these communities to keep their money at home and within reach.
Emotional Attachment and Sentimental Value
Money hidden in the house can hold sentimental value beyond its financial worth for seniors. It may represent a lifetime of hard work, thriftiness or financial prudence. These emotional attachments contribute to the perceived value of physical cash as a tangible reminder of personal achievements and values. Further, seniors may view cash as a form of legacy or inheritance for their loved ones. They may prefer to keep money at home as a way of ensuring that their assets are directly accessible to family members or beneficiaries without the delays or administrative barriers associated with estate settlement or a trust administration.
What happens when a home is sold with the assets still hidden inside? Who has rights to the found money?
Unclaimed Assets
One of the many issues that can arise with hidden assets is when the home is sold with the assets still hidden inside. Who has rights to the found money, the decedent’s estate or the new homeowner who stumbles upon a small treasure? This very issue was heard by an Oregon court in the Estate of Helene Valoff, Plaintiff–Respondent, v. CITY OF MILWAUKIE (2008), wherein the decedent homeowner’s estate sold the home to the new owners. Nearly two years later, an electrician working on behalf of the new owners found bundles of cash hidden above the ceiling of the basement. After the new owners reported this discovery, the local police seized the money, which was valued at $122,000. A trial court in Oregon ruled that the decedent’s estate remained the rightful owner because it did not intend to transfer any right to the money when the house was sold to the new owners. The new owners appealed, and the Oregon Court of Appeals reversed the trial court, concluding that the sales agreement’s reference to “all personal property” unambiguously included the money found in the house. The fact that the money’s existence was not known at the time of the sale was of no consequence.
Final Thoughts
While hiding money under a mattress or in a shoebox in the freezer does keep it within arm’s reach, it does not fully account for the inherent risks, such as losing the money to fire or theft or (as illustrated above) simply forgetting where the money was hidden. In such situations, renter’s or homeowner’s insurance might not provide full protection, as these policies typically insure only a small amount of cash. This strategy also places additional stress onto the decedent's trustee and executor, who are tasked with collecting all trust or estate assets and providing an accurate inventory of these assets.
The decision of seniors to hide money in their house rather than utilize conventional methods involving deposits with a financial institution can be shaped by a combination of life experiences, technological barriers, cultural influences and, of course, access to those financial institutions. Understanding these factors can help family, friends and advisors help seniors manage their money effectively and wisely. A better understanding of this issue can also underscore the importance of respecting individual preferences and values in money management. Encouraging trust and belief in the banking system by providing user-friendly technological solutions and addressing cultural and privacy concerns are important steps toward helping seniors transition to more secure and beneficial financial practices.
Baird Trust Company (“Baird Trust”), a Kentucky state-chartered trust company, is owne*Sourced by Baird Financial Corporation (“BFC”). It is affiliated with Robert W. Baird & Co. Incorporated (“Baird”), an SEC-registered broker dealer and investment advisor, and other operating businesses owned by BFC. Neither Baird nor Baird Trust provides legal services. Clients must work with their own attorneys to draft estate planning documents. Please consult with your Baird Financial Advisor about your own specific financial situation.
