Unclaimed Money And How To Find It
There’s a lot of unclaimed money floating around out there--more than $32 billion worth according to the National Association of Unclaimed Property Administrators (NAUPA). Where does it all come from and how did it get separated from its rightful owners?
Unclaimed money originates from many sources including stocks, dividends checks, lottery winnings, life insurance proceeds and even bank accounts that have been forgotten. The majority of this money gets separated from its owner for one simple reason, says Jim Hammond, who has more than 20 years of experience in recovering unclaimed property for individuals.“Most of the time you get in trouble because you didn’t change an address.”
The Letter Of The Law
Individual states have laws that outline what companies must do when they find themselves holding onto someone else's money. After a set amount of time (it differs from state to state), unclaimed assets must be escheated, which means turned over to the state's treasurer.
The SEC has its own set of rules for companies that have lost contact with shareholders. They are required to search for owners or their heirs. Some businesses will do that in-house and others will hire firms that specialize in unclaimed property recovery. After a certain amount of time, if those companies are unable to make any connections, those assets are also turned over to individual states.
Are You Owed Money?
Since each state maintains a database of unclaimed property, that is a great place to begin a search of what might be coming to you. Start at NAUPA's website and select a state where you or your relatives have lived. Don't forget to search by all the names you have used, both maiden and married.
If you find property that belongs to you, the NAUPA site offers information on how to claim it.
If you think that you may be owed a pension, the Pension Benefit Guaranty Corporation has its own website where you can search for that.
What About Banks?
Searching for abandoned bank accounts and items lost in safe deposit boxes can be more complicated because of bank mergers. According to Hammond, you have to start at the beginning by searching for the original bank that held the account and follow the trail of merger(s) to the new bank.
What if you receive a phone call that there's an asset that belongs to you and for a fee it will be recovered? Can you believe it?
Large corporations, mutual fund companies and bank transfer agents do outsource this research work. When you get the call, your options include waiting it out until the property reverts to the state. This can take years. Or you can let the company handle it for you and simply pay the fee.
Be careful, Hammond said. "You don't want to be in the position of someone trying to sell you your own money, but there is value there. Figure out the value of the service they're offering, and then negotiate."
And be wary of anyone who requires you to pay anything up front.
Don't Lose Your Money
So how do you make sure you don't lose out on what's coming to you?
"It is better off to keep the property yours, than to have to get it back," Hammond said. He recommends that consumers:
- Make a list of everything you own.
- Be a responsible shareholder. Answer all mailings and make sure you maintain contact with companies you own stock in at least once a year. That keeps your address current in their files.
- If you own stock in a company that merges with another, take steps to have your shares transferred correctly.
- Ask the IRS for a copy of your transcript which will detail taxable income reported under your Social Security Number, which could reveal dividends you aren't monitoring.
- Encourage older relatives to be careful with record keeping to make the job of settling their estates easier.
- Remember that stock certificates are a thing of the past; if you find one in Aunt Martha's safety deposit box be sure to ask the company involved if she had others.
- Be mindful of insurance policies that were owned with mutual companies that have since gone public. Your premiums may have made you a shareholder.
- Make it a point every six months to visit websites with unclaimed property databases. States can be years behind in recording assets.
No matter how organized you are, you may be surprised by an unclaimed property search. Who knows what is waiting out there for you?