Recovering Unclaimed Estate Assets

Americans are more mobile than ever. It is hard to keep up with all the deposits we make for utilities and other services, the bank accounts we open, the pension plans we participate in, and IRA and or 401k retirement accounts.

In addition, there are bonds, stocks, tax returns, life insurance policies, CDs and safe deposit boxes that may hold funds or other valuables. Money, property and other assets are generally considered abandoned when there is no activity by the rightful owner for three to five years. Such assets are turned over to the state in a process called escheatment. These funds do not belong to the state but are held in trust until the rightful owners can be located.

If the rightful owners are heirs to an estate, it is even more difficult for them to track down the assets of their loved ones. The National Association of Unclaimed Property Administrators, or NAUPA, states that every year billions of dollars in property goes unclaimed. A 2011 article in the Washington Post claimed as much as $32 billion in unclaimed money was being held in the United States. Melanie Hicken, writing for CNN Money in 2013, said that $58 billion were unclaimed by U. S. citizens unaware of their hidden cash waiting to be claimed. The fiscal year 2015 saw an unprecedented $3.235 billion returned to the rightful owners by government unclaimed property agencies of $7.763 billion collected, according to NAUPA. Could any of this unclaimed money be yours?

Tracking down these assets is no easy task, especially since each state has its own rules and laws to protect such assets. Another complication comes from the various ways in which people open accounts: in their single name, in their married name, in their name after a divorce, with or without a middle name or initials, and in any combination of the above. However, here are a few tips to facilitate your search.

How to begin
The first way to proceed is to do the search yourself. Under varying state laws, financial institutions and most businesses are required to turn over funds considered abandoned, such as uncashed paychecks, funds left in dormant accounts, unclaimed dividends and other holdings The state comptroller is responsible for holding these monies and trying to find the owners. State databases contain the current owner’s names in a database of unclaimed property or assets. States do not require a fee for searching their records, submitting the proof needed to make a claim, or returning abandoned property to you or your rightful heirs. The state holds only unclaimed property, but many other assets may be out there. Life insurance companies, pensions, U. S. savings bonds, and the IRS are a few of the other places where unclaimed funds may be waiting. You will need to search through each organization’s directory or database, since these are not held by the state.

Another way is to hire an abandoned property locating service. They send notification to people appearing on a published list of abandoned property, frequently the same databases states maintain. They charge a fee, typically around 15 percent of the recoverable property, to give you the name and code number of organizations whose abandoned assets have been turned over to the state comptroller. Assets may be substantial or minimal; you won’t know until you pay the fee and try to claim the property.

Rightful owner locating services are fee-based agencies that try to reunite the rightful owner with assets that have not yet been turned over to the state. These services are not limited by the state’s abandoned property laws. They may charge any fee mutually agreed upon. Before signing a contract with this type of service, it is important to understand the fee schedule. Typically, this type of fee depends on successful recovery of the abandoned assets. If the rightful owner is aware of his or her entitlement to the unclaimed asset, the recovery service cannot charge a fee for their service.

How to protect your assets
Everyone needs to prepare a will. Give a copy to your executor and keep a copy with your other financial documents. No state requires that a will be filed or registered to be valid, but it can be a good idea to share a copy with trusted family members or financial advisors.

Try to keep accurate and up-to-date records of your financial assets. Your records should include all insurance policies as well as rent and utility deposits. Your banking information needs to include all account numbers with the names and addresses of the banks, the types of accounts and stock certificates.

Checks issued for dividends, wages and insurance settlements need to be cashed immediately. You can protect assets by responding to requests for confirmation of account balances and stockholder proxies. To protect safe deposit box assets, record the number, bank name and address and give an extra key to a person you completely trust. ■

Sources: bbb.org, inheritancesearch.com, money.cnn.com, thelaw.com and unclaimed.org.