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What you should know about unclaimed money

Did you know that there are millions in unclaimed money out there? You probably didn’t, and you probably also don’t know what it is. Essentially, it is property (usually money) that has been financially obliged to a particular person, such as a contributor, employee, vendor, or customer, but they haven’t officially taken ownership over it yet. What this means is that the entity who paid the money can no longer access the funds either, since they have given up ownership, but the rightful owner hasn’t claimed it yet either. A lot of people don’t realize that escrow balances, uncashed checks, mysterious credits, customer deposits, insurance benefits, and unclaimed payroll are all classed as unclaimed money. The organization that pays the money is called the “holder”, as it remains in their books and in their accounts. The person who was due to receive the money is known as the “owner”.

Things to Know about Unclaimed Money:

  1. It can be remitted to the state in which it is known that the owner of the money had last resided. Once this happens, the “dormancy period” is over. Usually, this is between three to five years. If the money has not been claimed, then the original owner has to remit the money to the state. Once it is there, it is called referred and becomes unclaimed money or property.

  2. Sometimes, the money or property is referred to a state where the owner of the property doesn’t, or has never, lived. This happens if the holder has headquarters in a different state, as the money will then be sent to the state in which they are located. This commonly happens with large publicly traded companies, which have branches and offices all over the country. The money will then go to the state in which their headquarters are located.

  3. There are very complex laws in place in relation to unclaimed money. Each state also has its own set of rules and regulations. These rules are complex both for the holder and for the owner, and it can be very difficult for either to lay claim on the money at some point. If someone reports property in one state, they may also need to file a “negative” report. This means that there is nothing to report, or nothing to declare, although some money remains dormant. A great difficulty for holders is that they may have dormant money for owners in different states, and each of those states has its own dormancy period and rules. Nationally, there are more than 100 different types of property that can be classed as unclaimed.

There is a database of unclaimed money in this country. Unfortunately, its format varies significantly from state to state. Some of the difficulties are that:

  1. There are different data points and information fields, rather than there being consistency across the board.

  2. The dollar amount may usually not be displayed. Instead, some states will enter “unknown” or “$0.00”, which doesn’t mean the money isn’t there, but rather that its value cannot be determined. For instance, the property may be a stock or bond, which changes in value every day. Similarly, precious metals or jewelry from a safety deposit box will have varying values each day.

Finding Unclaimed Money

You must be quite savvy and clever if you are hoping that you own unclaimed money anywhere. Some of the things you need to do include:

  • Checking each state in which you had lived.

  • Checking against all your names (maiden, married, divorced).

  • Checking names both with and without apostrophes (O’Malley and Omalley for instance).

  • Checking against the exact name of a company, for instance The Auto Glass Co. instead of Auto Glass Company.

  • Writing the word “and” as “&” at all times.

  • Checking variables for common surnames, such as Smith/Smyth, Thomson/Thompson, Robinson/Robertseon, Schmitt/Schmit/Schmid/Schmidt, O’Brian/O’Brien, and Berry/Barry.You also have to be aware of the fact that unclaimed money may not be publicly listed until the dormant period has passed, which is generally two years. Additionally, the Unclaimed Property Divisions with most states are significantly understaffed, which means there is likely to be a huge backlog as well. Additionally, the state will be the unclaimed property’s custodian, which means that they are the ones who decide whether the owner or his or her heirs still have a claim to be made against it. In some states, a law has been passed that this kind of money automatically becomes state property after 10 years. This is true, for instance, in Indiana.

Over the past few years, non-compliance was all but fully ignored. However, more recently, there have been more significant deficits in state budgets. The result was that unclaimed money suddenly became a very hot topic. The vast majority of states do have entire departments dedicated to returning this type of property to its rightful owner. Yet, just 30% of what is unclaimed ever makes it back to its owner, leaving 70% active and current. States are very much interested in these funds, using them to pay for various public initiatives in the hopes of the money never being claimed. As such, the money is a type of “quiet” stream of revenue and more and more states are now looking for ways to make it less quiet and far more official.

Not everything that can be abandoned can also be classed as unclaimed property. For instance, animals, fixtures, boats, cars, and real estate can all be abandoned but they will never be covered by statutes relating to unclaimed property. The Unclaimed Property Division at a particular state will not be interested in them either. The only exceptions are abandoned safety deposit boxes, whereby the contents of these boxes is returned to the state while the rightful owner is found.

Most unclaimed property custodians are states, but there are also federal government organizations that hold these monies. These include those for FHA mortgage insurance refunds on premium, refunds on federal income tax, unclaimed pensions, FDIC for failed banks, America Indian trust royalties, lost Treasury bonds, and war claims for US nationals.

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