Dormant Accounts 101

Act Now, or Lose Your Savings to the Government

Dormant Accounts 101
August 5, 2014

You may have seen notices in your local paper regarding unclaimed property that is in the possession of your state government, either providing a list of names and addresses associated with the property or a link to connect you with this information online. These assets are usually forms of dormant accounts – accounts that have had no activity except depositing of interest for a prolonged period of time as defined by your state.

The time can vary from one year to five years and beyond, but once the account is considered abandoned, the escheatment process begins. “Escheatment” is not the Latin word for philandering, but the process of turning these unclaimed assets over to the state. Banks and similar institutions are required to file reports on such accounts annually to notify the state of their existence.

You may think you have no possibility of having unclaimed property, but there are many different sources aside from forgotten savings or checking accounts. Did you ever move and not get a utility deposit back? Did you forget to pay for a safe deposit box rental? Are you the unknowing beneficiary of a life insurance policy? Those are just a few examples.

Banks and other holders of the asset will make multiple attempts to contact you to reactivate the account. The state will also attempt to contact you, although states vary on how hard they try.

There is no statute of limitations on reclaiming your unclaimed property – although after a certain amount of time, states will assume the property is permanently abandoned and incorporate it into the state’s general revenue. Typically, non-liquid assets are sold at auction and the proceeds are incorporated. The time varies by state but most are in the range of one to two years.

How can the government sell and incorporate your “abandoned” assets if there is no statute of limitations on reclaiming them? The burden is on you to find and claim these assets, and you may not even be aware they exist.

In fairness to state governments, some assets truly are abandoned and there is no reason for state governments to be huge storage facilities for the assets of others. Having said that, some states have quicker triggers in transferring assets to general funds.

If you are able to establish ownership of such an asset, the state government will reimburse you for that amount (although they cannot reclaim any personal effects sold to others at auction). You will not be reimbursed for the interest.

You can prevent this happening to you through simple steps.

  • Maintain/Monitor All Accounts – Maintain some small activity in any little-used accounts and do not forget payments on things like life insurance policies and safe deposit boxes. If a regular dividend, royalty, annuity, or interest check stops coming, check with the issuer immediately.

  • Cash Checks Promptly – Checks cannot go uncashed indefinitely – they will eventually be considered as unclaimed funds.

  • Update Addresses – Whenever you move, make sure that all of your account issuers of any form are notified of your new address. Without the update, they have no way to notify you of any issues and you have limited options to check – especially if you move to a new state.

  • Keep Good Records – If you have not done so, take the time to list all of your financial accounts and assets. Keep this record in a safe place and review it yearly – contacting the institutions if necessary to verify your account status.

You can check with your State Treasurer’s or Comptroller’s office for the most recent abandoned property list, and there are several sites such as Missingmoney.com that can help you with a nationwide search.

Beware of companies who call you first claiming they have found your property and will help you get it back for a fee – you can reclaim the property yourself without a fee through the state’s mechanism. The Treasurer’s/Comptroller’s office should be able to direct you on how to reclaim the property.

You may well not have any abandoned property to reclaim, but it is probably worth a few minutes to check. Good luck with your search!

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