Why Locating Unclaimed Money Can be Challenging?

by : Vibhu Bansal

Government agencies acting as custodians for individual's and business's unclaimed money have no incentive, in general, to make it easy for the $ Billions to be found and thus claimed. Following presents many of facts, ways and methods by which the Government agencies employ, as subtle as they may be, to insure that the $ Billions are not easily found and claimed.

*All assets issued or owing by Federal Agencies will not appear in any State unclaimed database. Each Federal Agency maintains its own unclaimed property records, however only approx. 15 Federal Agencies offer online databases for the public to search for unclaimed accounts. And those databases are not easily found nor readily linked to from the Home page.

*Specific assets issued by many State or local governments themselves (State income or property tax refunds, payroll, child support checks, vendors checks or warrants) will NOT show up in State databases because its owner has a specific time frame by which to claim these unclaimed assets or refunds. Once the specific time period has lapsed, these unclaimed assets become the property of the government agency. This is similar to one's IRS tax refund - one has 3 years to file and claim an IRS refund.

*The dollar amount or value of the unclaimed property is under specific value i.e.) $50 or $100 and the some States do not upload these records into their online database.

*The unclaimed or lost asset is still in its 'dormancy period' meaning the asset holder is not yet required to transfer over to the appropriate Government agency. This 'dormancy period' varies per property type and per each state's unclaimed property statutes. The 'dormancy period' could be as short as one year and as long as 15 yrs. The average is less than 5 years and being shortened by Government agencies all the time. Those assets in their 'dormancy period' are also called "pre-escheat". An unclaimed asset that is in government custody is called "escheated".

*Some States will sell escheated securities immediately and credit the owners account; whereas, other States will hold retain the securities, but may not give a dollar value to these (actual value can change daily) in their online database and with a some States the value will be given as $0 or might not be uploaded into in their database for a couple of years.

*Cashier checks, money orders and traveler checks are examples of unclaimed property turned over to the States without names. The holders report the ONLY the check or serial number, date of purchase and amount. Also note, travelers checks typically have a 15 yr. dormancy period most likely due to their strong lobbyist presence. I have seen records listed as a serial # in the Owners Name field! These accounts will likely never be claimed!!

*A few States only list the most recently added unclaimed accounts.

*One must search under a maiden name, various spellings and initials of one's first name, nicknames and/or possible misspellings of the last name.

*One may need to check all states in which you have resided or worked in, as well as, the State in which a former employer/company is or was headquartered. Per a 1965 Supreme Court ruling Texas vs New Jersey, if the address of the owner of the unclaimed property is unknown or is a foreign country, then the property is transferred to the State in which the holder is incorporated. Start with States such as Connecticut, Delaware, New York and Illinois that are the headquarters for many large publicly traded and financial service companies. IN OTHER WORDS, ONE COULD HAVE AN UNCLAIMED ASSET BEING HELD BY A STATE IN WHICH YOU HAVE NEVER LIVED NOR WORKED!!

*Many States Unclaimed Property Divisions are understaffed and cannot update regularly.

*Two States, namely Indiana and Idaho have passed laws by which assets left unclaimed after a specific number of years in their custody will not longer be claimable by the Owner, but will become the property of the State.

*Tangible items left in an abandoned Safe Deposit Box will, in most States, be auctioned off and the proceeds credited in the owner's name. The proceeds amount may not be listed in the database until after the auction.

*Since unclaimed assets/money is effectively revenue for the States, if there is a question as to the last known address of the owner, State A maybe challenging or delaying a reciprocal agreement to transfer the asset/money to State B and therefore not list that asset/money in its public online database until the issue is resolved.

*There is no incentive for any Government agency to try to find or to contact individuals who have unclaimed money or property. These funds, for the most part, once received are placed in the Government general fund and spent on roads, schools etc. Fortunately for the Governments, it has been reported that only 30% of all abandoned money transferred or escheated to the Government is EVER claimed and the money is flowing in at an increasing rate each year....In theory, if everyone claimed their money at one time would be comparable to a "Run on the Bank"....many States do not have the cash reserves to meet this obligation.