Odds of Winning the Lottery 1 in 14 Million; Odds you have Unclaimed Assets 1 in 10
There are over 50 billion dollars in unclaimed assets in the United States currently reported, but some experts estimate that that number is double if you include assets that have not yet been reported and the numbers are growing. Total unclaimed assets have increased by over 50% in the past decade alone. This, despite the fact, that it is easier than ever to search with technology at our fingertips.
So what are these unclaimed assets, how can you find and claim for yourself and others, how difficult is it to actually reunite with your Benjamins, and how can you ensure that your assets don’t wind up on a list for your loved ones to chase?
When a financial institution, company or government agency has assets for which there is no known address, the assets (tangible and intangible) must be returned to the state within a certain period of time of inactivity – generally 3-5 years. Assets include:
- Checking or savings accounts
- Uncashed dividends or payroll checks
- Traveler’s checks
- Trust distributions
- Unredeemed money orders or gift certificates (in some states)
- Certificates of deposit
- Customer overpayments
- Utility security deposits
- Mineral royalty payments
- Contents of safe deposit boxes
- Insurance payments or refunds and life insurance policies
- Annuity payments or benefits
Looking at the numbers when deciding if a Roth conversion is a good option
Funds are returned to the state treasurer of either the last known address of the named holder, or to the state of incorporation of the holder when the address is not known. The common law doctrine that defines this process is known as escheating. Assets could be escheated and later found in states you never lived or may be in the largest Incorporation State for businesses, Delaware. There are specific time frames for each of the asset types to be escheated to the state, however, when the clock starts is quite vague. It could include time after inactivity. On a cash value life insurance policy, or term policy, there may be sufficient funds to keep the contract in force, allowing the policy to sit on the company’s books for years after the insured has passed away. Further, if the beneficiaries addresses, phone numbers or names have changed, the carrier may not be able to find the rightful claimant. Couple that with the consolidation of carriers over the years and an old policy found in the attic or drawer may be for one of the 65% of insurers that no longer exist today. As former financial services professional, for one of the largest and oldest insurance carriers in the US, I witnessed firsthand that many owners didn’t remember taking out the policies in the first place or had not heard from their agent or successor agent since the purchase. Not surprising, considering the industry thas an 80% attrition rate of agents.
Now, you may be wondering if you find unclaimed property, what will it be worth? The largest claim in US history was a plump 6.1 million in Missouri, but before you shift your retirement plans, it is estimated that 70% of the claims are under $100. Rule #1 of investing, as we say in our industry, is TAKE THE FREE MONEY! And if you know how to claim $50 now, you will be ready for any future claims and can help your family and friends as well.
Finding and Claiming Assets
While there is not one unified site to search, you can go to the individual state sites or go to the NAUPA – National Association of Unclaimed Property and click on the state within the map.
Also included are assets that may be unclaimed outside the US. One additional site, MissingMoney.com has info on several states, but not the largest holder of unclaimed assets, which is CA with an estimated 9 billion…yes with a capital B.
There is no timeframe to claim assets, however, there has been proposed legislation to limit the claim so it may not stay that way forever. Most states update the list semi-annually, so it is a good idea to check back on an annual basis for new
You can file a claim for yourself, as an heir with either a closed or open probate, or as the legal representative or authorized person for current or former business. Due to the massive unclaimed assets, there are also fee-based representatives that will claim for a fee. The states and NAUPA both remind consumers that the search and claim process is FREE. Where there is opportunity, there is likely to be opportunists that will take advantage of the free information and try to capitalize. If you are going to have someone else do the research and file the claim, make sure you are paying for the value of the time and consideration, not committing to an exorbitant percentage of the claim or agreeing to a flat rate that is unreasonable given the likelihood of small payout.
Here’s where it gets interesting – claims could be in states you never resided as they may be returned to the state of the issuer. The claim could be under the name of relatives that passed decades ago and need to be searched under all names and variations held through you/their lifetime. The claim could be for the benefit of the named recipient of the estimated $80 billion of matured US Treasury bonds or stock certificates that were issued as physical certificates.
How difficult is it to get reunited with your claim?
Great question and one that I will have to update as I go through the process myself. I not only found assets under my own name, but deceased grandparents for which my generation are the only remaining heirs and over 20 in one state alone for my Aunt & Uncle that passed away 6 and 3 years respectively with what was thought to be a closed estate. Once you click ‘claim’ on the website disclosing the asset, you will receive a claim form with instructions via email. For some assets, this will be an easy process once you get your documents in electronic form to attach (birth certificates, marriage certificate, driver’s licenses, IDs, etc.) As with any document, I would always encourage you to store these safely and for future claims that may arise. I recommend uploading and only sending from a server that has encryption technology.
With claims that are for relatives that you may be entitled to, the process may be a bit more cumbersome. At this time, the generation that would be entitled to unclaimed assets from my paternal grandparents will require wills, trusts, death certificates for not only the named claimant, but for the first generation that has all passed and proof that we have right to the unclaimed property. I will follow up with future posts and keep you apprised of the timeline.
Within our office, we were able to assist a client in claiming escheated assets to the tune of $80,000. The process took almost two years, but was greatly extended by the lack of follow up on the part of the recipient to email and document requests. In contrast, a family member that I assisted by finding a local claim, was not required to submit any paperwork, simply an electronic affirmation of identity, and received a small claim in less than two weeks.
How can you ensure that you and future generations have easy access and limited claims?
- Make sure you have a comprehensive list of your assets in one safe location
- Update and review your beneficiaries every year – even if they have not changed, you can update their phone numbers, email addresses and add information that you may not have had when the account was established.
- Work with your financial planner and legal representatives to keep your data current*
- As you go through old documents – see where you may have made payments or deposits in the past, check the states of your creditors and companies that you may have subscriptions to in the past and check their database as well.
- Help the senior generations in your family by connecting them with a trusted advisor – the electronic learning curve can be daunting and may be the reason that future assets go unclaimed.
- Start a genealogy list of names, dates of birth/death, will and estate plans, POAs, along with place of their employment and residency. Fortunately, previous generations did not move around as much physically or fiscally. Ask them while they are alive if they ever remember talking to or purchasing insurance/annuity policies and if they have a safe deposit box.
- Finally, be cautious and conscientious when looking for claims. Advisors with appropriate licenses are held to a fiduciary standard and as such can be a great source in assisting with claims. As advisors, we also have a list of TRUSTED referral partners that we can connect you with for estate planning, legal paperwork, tax specialists and yes, even folks that can help you track and file your claims. Be aware that the internet and the amount of assets that are unrecovered are a hotbed for fraud. Use a trusted advisor.
If you have questions, additional information, or experiences you would be willing to share to help others, please contact me.