Unclaimed Assets: How To Claim What's Yours
by Malcolm Katt
June 2008
Over $60 billion in unclaimed property and missing money that belongs to millions of Americans is sitting with government agencies, insurance companies, banks, and other entities. These assets include unclaimed life insurance proceeds, lost bank accounts and accounts at closed banks, IRS tax refunds, Social Security payments, and more.
In the eyes of the law, assets are deemed abandoned when contact with the owner is lost—in most cases because of a name change after marriage or divorce, an unreported change of address, illegible or incomplete records, or clerical errors. When owners fail to communicate an interest in an asset over a specified number of years (known as the “dormancy period”), those left holding unclaimed assets, such as banks, stockbrokers and transfer agents, utilities, employers and life insurance companies, remit the funds to the protective custody of a government trust account in a legal process know as “escheat.”
In addition to those who have neglected to claim their own assets, millions of family members are unaware they're eligible to collect unclaimed assets owed to deceased relatives who died without leaving an updated will or a financial roadmap for their heirs. Your pot of gold may be sitting out there waiting for you to claim it!
Find Missing Money
You may be due unclaimed money and not even know it. To claim these assets, here are some key points:
1. In most cases, the federal government and states holding unclaimed funds does not contact you. Why? They wait for the statute of limitations to expire so they can claim your unclaimed assets. Your unclaimed assets are like free money to state, local and federal governments. So, you need to search to find.
2. Find missing assets on your own, which will cost you only your time, or use a service to search for these assets for a fee.
3. Prompt action is advised--some types of assets are subject to a statute of limitations, so if you fail to track them down within these limits, you lose your rights to them.
Income Tax Refunds
In November 2007, the IRS was looking for over 115,000 taxpayers to which it owed $110 million in refunds. These checks, which averaged about $953 per taxpayer, went undelivered mainly due to unreported changes of name and/or address, typically after a move, marriage, death or divorce. Checks that are returned to the IRS must be reissued upon the taxpayer’s request (call the IRS at 800-829-4477 or click on www.irs.gov).
In addition, checks worth about $6 billion have been sent but never cashed. If your refund check has been destroyed, lost or voided due to the passage of time (usually past one year), contact the IRS and request that a new check be issued. If you are the heir of a deceased taxpayer who may be owed a refund due because of an overpayment made during the year of death contact, the IRS immediately—the right to a refund is limited to three years if a tax return is not filed for any period in which a refund is due.
Insurance Policies
More than one quarter of all life insurance policy payouts worth hundreds of millions of dollars go unclaimed annually. It is generally up to family members to notify the insurance company when a policyholder dies, and many families simply aren't aware a policy exists.
Also, because many life insurance companies have demutualized, millions of current and former policyholders are entitled to receive stock and cash in addition to policy benefits. Demutualization occurs when a policyholder-owned company converts to a company owned by stockholders. The policyholders are supposed to get shares in the converted companies and, as a stockholder, to be able to collect dividends and benefit from any appreciation in the stock price. For example, when MetLife demutualized in 2000, it couldn't find the owners of some 60 million shares, about 12% of the shares allocated to policyholders.
Claims can be made at any time but it's best to act fast. Unclaimed stock can be sold by a government-appointed custodian after a relatively short time period; after that, policyholders-turned-stockholders are entitled only to the proceeds of the sale (they lose out on dividends and appreciation following the sale). A list of demutualized insurance companies and contact information can be found at www.claims-info.com/Overview.htm.
If you hold a policy from one of these companies or are the heir of someone who did, contact the company directly and ask if you are owed money from an unclaimed policy or demutualization, either as a policyholder or an heir. You may be directed to the insurer's transfer agents, the firms that handle share transactions, for a demutualized company, or you may be referred to a state unclaimed property office. Typically, after three to five years, unclaimed property and cash is turned over to the state in which the policyholder had a last known address.
Rebate Checks
Retailers and manufactures purposely make rebate forms complex and time consuming so consumers generally give up, especially when the money involved seems small compared with the time and work needed to submit a claim. Still, it’s your money so don’t lose out on your rightful rebate.
Even if you complete the rebate process, your forms may be rejected for unfathomable reasons. Mail the form "Return Receipt Requested" and keep a copy. If you don't receive a check, follow up with a written inquiry to the merchant's customer service department. Include copies of your original request and the mailing receipt. If this too fails, contact your state's attorney general's office (find this at the National Association of Attorney's General-202-326-6000 or www.naag.org/ag/full_ag_table.php) or the Federal Trade Commission (877-382-4357 or www.ftc.gov).
Savings Bonds
US savings bonds, which are often received as gifts and tucked away for years, may have stopped earning interest. This happens when the bonds reach final maturity and less than 1% of bondholders are notified when their bonds reach that date (only holders of Series H and HH bonds that pay interest by check are notified). The value of unredeemed bonds that have reached final maturity currently exceeds $15 billion.
Information on replacing destroyed, lost or stolen bonds can be found at www.treasurydirect.gov.
Utility Deposits, Paychecks, Dormant Bank Accounts, and More
Some $23 billion is sitting in state's unclaimed property offices representing utility deposits, uncashed paychecks, the contents of safe deposit boxes, dormant bank accounts, and more. Databases of unclaimed property in every state and the District of Columbia can be accessed on line. To search by your state, go to the National Association of Unclaimed Property Administrator at www.unclaimed.org.
In addition to checking your state of residence, also check in any state in which you’ve previously lived, worked, or done business. Use all name combinations that may be applicable--your maiden name, any previous married name, with and without middle names and initials. Also search for names of deceased relatives.
Even if you don’t think you have a connection with Delaware, it’s a good idea to check its database because Delaware holds millions of dollars for residents of other states. The reason: When the owner of an asset of a company that is incorporated Delaware (which is most publicly-traded corporations) can't be located, the assets are transferred there. To locate assets in Delaware contact the Delaware State Unclaimed Property Division at 800-828-0632 or http://revenue.delaware.gov/information/Escheat.shtml.