By Tom Houle and Kayte Tarantino
02/25/2020
As simple as clicking a few buttons on your PC, you may claim your portion of the over $4 billion in unclaimed assets held in Escheatment. A term more commonly used during the medieval times to reference land falling out of the possession of a family and being given to the overlord, today the term is used to denote the transfer of a person’s property to the state when unclaimed.
Per the NY Times, state agencies returned $3.235 billion in cash to owners in 2015. Agencies received $7.763 billion in new unclaimed assets the same year¹. With billions going unclaimed, you could be missing out on a cash payout of YOUR own money.
Forgotten about an old retirement account, insurance policy, or check from a past employer? If so, that money might now be sitting in the care of the state government, just waiting on you to claim it. This act is referred to as Escheatment – the process by which abandoned assets get turned over to the state. After some time the state becomes the owner of the unclaimed accounts and/or property.
The good news is that the money doesn’t directly go into the government’s pockets for them to do whatever they want. You have the legal right to claim what is yours, or at least the cash value of it. States only hold on to securities and other assets for a certain amount of time and then liquidate them to keep money from the sale; however, not every state has the same rules. Additionally different accounts have different rules for how long firms can wait to turn over assets and property to a state. Generally speaking, the state must wait between one and five years before escheatment begins.
There are many reasons you would lose track of money or property. You took the money in your checking account to a new bank, but forgot about the savings account. The time you changed jobs but didn’t roll over your 401(k). Or you possibly received a life insurance payout but didn’t realize it. The financial institution holding your money is required to try and find the account owner. But if you’ve moved or updated your contact information since the account was opened, they may have a hard time tracking you down. If they are unable to find you and the account remains inactive for five years, the escheatment process begins, and the institution will turn over that money to the state government.
Take a few minutes, go to the website below, and identify if you have any unclaimed assets. It is your chance to claim your part of the $4 billion available.
How to find old accounts and property
- If you’re looking to see if you have any unclaimed property, you can browse the National Association of Unclaimed Property Administrators (NAUPA). This site has a database of every state’s unclaimed property programs. NAUPA maintains the search to find each state’s program, but every state manages its own programs.
- Every state has its own escheatment rules, including a time limit on making escheatment claims. For the most part, you should be able to verify the account was yours. It is also allowed to claim property as an heir.
How to avoid Escheatment
Financial institutions are required to escheat if they’ve failed to contact the rightful owner. But you can prevent escheatment from occurring if you take a few steps:
- Regularly check up on all your accounts, including checking, savings, investments and insurance accounts. If you have got a retirement account through work, make sure to move it over to your new work investment account or an independent one, like an IRA.
- Update your information.
- Cash in on dividends.
¹ https://www.nytimes.com/2019/11/06/your-money/unclaimed-assets.html
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