The topic of unclaimed property has become a hot button issue in recent years as a result of the current economic downturn and the growth of state budget deficits. According to the National Association of Unclaimed Property Administrators, the states collectively hold over $41.7 billions in unclaimed property with the average claim amounting to $892.
While most states have departments committed to returning unclaimed property to its actual owner, on average less than 30 percent is returned, allowing cash-strapped states to use unclaimed money to fund various public interest projects.
On October 31 and November 1, business and financial institutions must submit their unclaimed property reports to the various state treasuries. And for consumers, these dates are important to remember as they could be losing property that is rightfully theirs. In fact, did you know that states can legally take money away from you after a period of inactivity? It happens all the time and it’s called escheatment.
Each state has abandoned or unclaimed property laws which allow them to claim abandoned property (bank accounts, safe deposit box holdings, stocks, bonds, etc.) after a specific amount of time. Generally speaking, three to five years is the trigger for dormancy – but it varies by state. The bottom line is, the state could owe you money!
Here are five quick tips for consumers on how to check if the state has unclaimed property in your name and how to prevent assets from being escheated in the future:
- Find out if you’re owed money. Go to your state treasury’s home page and check out the unclaimed property link. If you have lived in other states, check out their Web sites as well.
- Keep good records, cash checks, and don’t misplace stock or bond certificates. Always cash or deposit checks when you receive them. Stockholders sometimes lose out after a merger/acquisition. Make sure you tender shares in a newly formed company.
- Check with parents or elderly relatives. The more you understand about their finances, the better prepared you’ll be to protect them.
- Don’t forget Uncle Sam. If you didn’t make enough to owe federal taxes in recent years but had money deducted anyway, you may be due a refund.
- Remember to file change of address cards. It’s always important to notify the holder of your funds in the event of an address or name change.
- Keep active on all accounts. For example, log-in to all online accounts at least once per year. For each bank or brokerage account you have, make at least one balance inquiry, deposit or withdrawal each year.
According to the law, organizations that hold money for account holders must make “reasonable efforts” to contact the owners. I searched for my own name today, October 3 and found that my state owed me money from an uncashed tax refund check. The funny thing is that they had my correct address, but I don’t recall ever getting a notice in the mail.
Beware though, there is a popular scam where members of the public are sent letters via the U.S. mail claiming that unclaimed funds are available, but that money must be sent in order to claim those funds. You should never have to pay a fee to get your money although they can be legitimate businesses called finders or locators.
Instead of being taken for a ride, simply go to MissingMoney.com and enter your name to search for money that could be waiting for you. I’ll be sure to check this site every year. Now, how am I going to spend that money?