Government

The State May Have Your Unclaimed Property

At some point in time, practically everyone has had a bank account, owned stock or worked for a paycheck. And we're all busy, and so we forget that we put money away in a bank somewhere, or we change jobs and don't realize that the old employer still owes you money.

So what happens to it? You may be surprised to know that the state may be holding that money for you. You may be even more surprised to learn that sometimes the state will keep it for itself.

What's "Unclaimed" Property?

Unclaimed or "abandoned" property is property that the owner hasn't paid attention to for a period of time, usually one year in most states, but the time varies from state to state, and may depend on the company or bank, too. You may have forgotten about it, or you simply didn't know it existed, and so it sat on some company's books waiting for you.

It can be just about anything, but some good examples include:

  • Money in savings and checking accounts
  • Stocks, bonds, and uncashed dividend checks
  • Payroll
  • Tax refunds, and
  • Security deposits paid to utility companies

Every state in the US has a program for trying to reconnect the owners with their property it. So, usually after a year, if the bank or company still has the money, state law requires turning the money over to the state where you lived at the time you began doing business with the bank or company.

Then What?

In most states, a special officer or agency - it may be called the "controller" or "treasurer" - will hold the money until you claim it, especially if it's cash or uncashed checks. In some states, property like stocks and bonds will be sold and the sale proceeds will be held for you. The state agencies are supposed to make every effort to contact the owner so that property may be returned.

In some states, however, unclaimed and abandoned property may be kept by the state. If the state can't find you or if you don't make a claim for it, the property goes to the state through a process called "escheat."

Other states will hold the money for you. In some states, the money goes straight into the state's general fund where it's used for things like street and highway repair, public education or other public programs.

Maybe as a sign of the recent economy, it appears that some states aren't trying as hard as they should be to reconnect owners with lost funds. For example, a California resident recently had to hire an attorney to help her get money back that escheated to state.

Her mother received a cashier's check from a bank after her uncle died. She didn't cash the check, but she held onto it for five years. When her daughter discovered it and tried to cash it for her, the bank told her that the state of California took the proceeds. The lawsuit is still pending.

In some states, officials are targeting the abandoned and unclaimed accounts of out-of-state customers. The officials know that so long as the company or bank is doing business in the state and the funds don't have a current in-state address, the funds can be seized. This practice can lead to large chunks of money going to the public coffers.

Take Steps

To avoid losing your money to the state, there are two things to do. First, don't "lose" your money in the first place. Make every effort to:

  • Immediately cash all the checks you receive for dividends, wages, insurance payments and refunds
  • Answer any requests you receive from banks and companies for confirmation of account balances, stockholder proxies and current address
  • Keep a list of all of your bank accounts
  • Read your mail. It may look like junk mail, but make sure you open and read any letters you receive from banks, utility companies and insurance companies

Next, go on a treasure hunt … today. Most states have a Web site that allows you to search for unclaimed or abandoned property by using your name. The National Association of Unclaimed Property Administrators (NAUPA) has an excellent tool to help you here.

Each state usually provides detailed instructions and all the forms necessary for you to file a claim for property you think belongs to use. The claims process is fairly simple and straight forward, and usually requires that you provide good proof of your identity - social security number, driver's license number, etc. - and an explanation of why the money is yours.

It's well worth your time to do these things. It's your money. Keep track of it as best you can. If you lose track of something, let the state know you want it back.

Questions for Your Attorney

  • I got a letter from a company stating that it located money that belongs to me in another state and, for a fee, it will claim it and return it to me. Is this legitimate? Should I do it?
  • I made a claim for money held by the state treasurer, but my claim was denied. I'm pretty certain the money is in fact mine. What should I do now?
  • Can I file a claim on behalf of my elderly father, or does he have to do it in person?

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