In the days of feudal England and maybe before, rulers and governments have believed that it’s in the best interest of society (in other words, themselves) that no property ever go unowned and unprofitable. Thus, they decided to take ownership of any property that is otherwise unclaimed or abandoned. Upon the death of a landowner without heirs or if he committed a felony, the King would assume ownership for a year and a day before ownership reverted to the lord who originally granted the land. This process was known as escheatment. It proved to be a decent source of revenue for the monarchy. But what you may not know is that the process continues today in modern America.
Thousands of forgotten savings accounts, uncashed payroll checks, stocks, and even the contents of safe deposit boxes are taken over by the State every year. Most people never know that they’re missing money because their contact information was out of date and the notices went undelivered. Many of these people will never get that money back. Instead, it will sit in the State’s coffers along with over $32 billion worth of other people’s property.
I was informed this week about an ING DIRECT initiative to help consumers protect their property from escheatment. While the campaign is somewhat self-serving (when the State takes over an account, neither you nor the bank earns any interest or retains any benefit of the property), it is important that people be made aware of the risk associated with dormant and abandoned accounts. If you’re interested in learning more, you can visit their FAQ on Escheatment and learn about their campaign to change unclaimed property laws.
Escheatment is an ancient practice, but one that’s unlikely to change significantly. Altering the laws may help consumers, but escheatment isn’t just going to go away. Ideally, you should never give the State an opportunity to take your “unclaimed property” in the first place. By keeping track of your various bank and brokerage accounts, you’re less likely to lose any of your property. Your safest bet is to contact the managing company of each of your accounts once per year to let them know that you haven’t forgotten about your accounts and to visit each of your safe deposit boxes anually. Alternatively, if you make at least one transaction on each of your accounts each year, you should be safe from having your money taken by the State.
Unfortunately, even the most careful person can lose track of an account or two. If you believe you may be missing some money (or if you’re just curious, as I was), you should visit the National Association of Unclaimed Property Administrators site (http://www.unclaimed.org) to find the appropriate site for your state. You should search each state in which you worked or lived since missing money may be hidden just about anywhere. Getting your property back won’t necessarily be easy, but beware if you’re asked to pay a fee. Since you’re dealing with the government directly, you won’t get back any interest you would have earned, but you should receive back everything that was taken. If you’re asked to pay to have your property returned, be highly suspicious since you’re likely getting scammed.
Have you lost money to escheatment? I haven’t yet, but I know that my dead grandmother has property held by the State, but nobody knows who can claim it since I’m pretty sure she didn’t leave a will. I’m curious to hear from someone who has had to go through the claim process to see how painful it really is and how long you have to wait to have your property returned.
Photo by: teresia
{ 1 trackback }
{ 2 comments… read them below or add one }
One thing you should do if you’re looking at missing money is look for your relatives, family members, friends; all those people you think wouldn’t go and look themselves - you never know what you can find for them. They’ll always be happy. :)
I thought I found a thousand dollars for my sister once but it was for someone else. Oh well… haha.
The same holds true in Canada. Dormant accounts are taken over by the Bank of Canada after 10 years.
http://www.frugalcanadianliving.com/2008/07/lost-money-and-dormant-accounts.html
I am not sure about safety deposit boxes through. Still trying to find some more information on what happens to them if you stop paying the fee.