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Do You Have Unclaimed Property?

The story goes something like this. A man’s father finds a COD slip from April of 1995 that one of his grandparents opened as custodian for him as a minor. The COD states the maturity date was October of 1998, and notes the renewal policy as “automatically renewable: new rate will be determined on maturity date.”

When he went into the bank to see what the status of the CD was, they said they had no record of it. They destroy their records after seven years. The bank told him they had likely tried to contact him or his grandparent at some point and that he should check his grandparent’s estate or state treasury department sites for lost money.

His grandfather died 15 years ago and he has no memory of seeing correspondence about the CD or even knew it existed. The paper he had marked COD didn’t say anything about being paid on death or anything about the account expiring.

The bottom line? The bank told him there was nothing they could do. The slip, even though it had dates, his social security number, the amount, the rates, interest payment annually added to the principal, and was signed by an officer the bank, was viewed only as a receipt. Without them having a record of the CD under his social security number, he was told they couldn’t determine if he had already cashed it out, or if it ever existed.

Banks must turn over dormant accounts to the state Escheatment Department after a period of time, which varies by state.

There’s a big lesson here. Communicate, communicate, communicate. Who knows why the grandparent never told him about the CD they had for him. If they didn’t want to tell him, then leave a paper trail. Such information should be in a will, letters to loved ones, or anything but kept secret. He may never see the money they intended to enhance his life.

What are your rights in a situation and what can you do?

“Banks must turn over dormant accounts to the state Escheatment Department after a period of time, which varies by state. If you find evidence of an old account you can contact the Escheatment Department (Department of Unclaimed Property) and search for assets which were turned over to the state,” says Ira Smilovitz, an enrolled agent.

He advises searching in every state where you lived, and the person who opened the account lived and where the account was located.

Go to the website for unclaimed property for each state. The sites have search engines. You also want to check out the website of the National Association of Unclaimed Property Administrators, www.missingmoney.com.

Go to the website for unclaimed property for each state. The sites have search engines. You also want to check out the website of the National Association of Unclaimed Property Administrators, www.missingmoney.com

“People should know that it may take months or longer for these state agencies to log the money into their system,” cautions Michael Zwick, an attorney and president of Assets International, which has recovered more than $60 million for individuals and small companies.

In some states, you can generate a claim form, which has all the instructions on it, from the website. In others, you have to fill out a form to have a claim form mailed to you. “In many cases, especially if the claim is worth at least a few thousand dollars, the state may well require you to jump through a number of hoops, especially if the account owner is dead. This where the assistance of a professional comes in handy,” says Zwick.

Once you submit a complete form, most states take anywhere from a few weeks to a year to pay a claim. “The two big factors are how big the claim is – the bigger it is, the more approvals it will require – and the state. Some states are woefully understaffed,” says Zwick.

Be clear what the state requires. “Each time you send something for your claim, there will be at least a few weeks before you hear anything from the state. If you send your claim piecemeal, each portion will require weeks or months of waiting,” says Zwick.

Smilovitz believes it’s a good idea to do unclaimed property searches every few years, even if you don’t expect to find anything. “We just located assets belonging to my wife’s aunt who died in 1990. Her estate had been settled and closed in 1992.”

Anonymous   |     |   Comment #1
Just another way to rip you off.
Anonymous   |     |   Comment #2
Study the law regarding dormant accounts.
Anonymous   |     |   Comment #4
Dormant accounts like the ones the credit unions use? Take $5 if your account is dormant even if you have a CD there, another way to rip off the consumer. 
Anonymous   |     |   Comment #5
Which CU are you talking about?
Anonymous   |     |   Comment #3
My husband and I did the Chase promotions and at the end of the promotion he still had $50 in the cash back credit card account that was due and not paid yet. My husband got sicker and passed away and I closed the account and a few months later I was on our state treasury site and there the $50 was. Chase had turned it over. I filled out the paper, sent in a copy of the death certificate and got the check in days not months but then it was only $50. 
paoli2   |     |   Comment #6
All banks and credit unions have their own rules for how they handle dormant accounts.  This is why I called all of ours and have typed a sheet for those who may inherit the accounts when I pass on.  Several of my institutions said they send out a letter giving customers a chance to save the account before it goes dormant.  One phone call to just say basically "hello, I am still alive!" is all it really takes to keep the accounts open from what I was advised. Each year I make my calls.
fb-e7f8c05f07e70127221ae81fd0579b90   |     |   Comment #7
There are companies that specialize in finding people entitled to unclaimed money and unclaimed property, perhaps the best known being Heir Hunters International out of Los Angeles.  In the main, such companies handle the "hard cases," where the funds have been dormant for a significant period of time, more likely than not, because the original owner is deceased.  In order to find to whom the funds belong, such cases involve a significant amount of research, which requires financial resources, for example paying for researchers or for travel to libraries/courthouses/archives, often abroad.  When approached by such a company, always run your name in the relevant databases, but also understand that your name may fail to appear. When dealing with an “heir hunter,” the golden rule is: legitimate "heir finders" never, ever ask for you to provide money up-front, but are paid out of the share the "missing heir" receives after the firm has secured the inheritance.
Anonymous   |     |   Comment #9
my dad noticed in the paper a list of people who had assets turned over to the state of nj and it listed name and last know address and he saw my name there.  He let me know and I got the funds (450 dollars)  I had no idea about it.  what is crazy is that they had my name address and they listed  it in the paper and I am still at the same address
Ally6770   |     |   Comment #10
Escheat: The power of a state to acquire title to property for which there is no owner.How is it determined that an IRA has no owner? This will depend on both state law and the procedures in place at the institution holding your IRA or employer plan assets. Some typical hints could be mail that is returned marked undeliverable or accounts where there are no transactions.If you have an IRA or an old employer plan where you are no longer making contributions, then there are no transactions taking place within the account. This could leave the account open to escheatment.How can you tell if your retirement account has been escheated? You should be getting statements for each of your retirement accounts. For IRA accounts, you should also be receiving a Form 5498 each year that tells both you and IRS your year-end IRA account balance. The form is informational only and is required to be issued by May 31 each year. If you are not receiving statements or Form 5498, your account may have been escheated.There is a process for the escheatment of funds. The process generally includes some method for finding the owner of “unclaimed” assets. There is also a waiting period before assets revert to the state. Most states have a five-year waiting period, but some states are now using a shorter period to help make up their funding shortfalls.Many times what is escheated is cash from unclaimed refunds, insurance policies, or bank accounts. There is usually no tax consequence for these transactions. But retirement accounts are different. When they are escheated, they are generally cashed out. The state does not want to hold your investments and retain them in a retirement account for you. They want cash to pay their bills. This creates a taxable distribution to the owner of that account. If the owner does not receive a 1099-R for the distribution, then they do not know about the escheatment and don't include the distributed amount on their tax return.When your retirement funds are escheated are they gone forever? Generally, no. The states have procedures for you to reclaim your funds. When you get your retirement funds back, you will have two choices. Keep them as non-retirement funds because you have already paid the tax on them or are in the process of doing so, or return them to an IRA account.Returning your escheated assets to a retirement account may not be as easy as putting them in an IRA. Usually you are replacing the IRA assets a year or more after they were escheated. You will most likely have to go to IRS for a private letter ruling to get their approval to complete a rollover. This is a costly and time consuming process. The IRS fee for this ruling is $10,000 and you will have to pay a fee to someone to prepare the ruling request for you. Then there is a waiting period while IRS reviews your request and makes a decision.Bottom line, avoid escheatment. Check up on your retirement accounts regularly. Make sure you are receiving statements. It is generally a good idea to consolidate old accounts to make this process easier to manage. And watch out for inactivity. You may need to make a contribution or take a distribution, even if it is a very small one, to keep the account “active.”

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