Unclaimed Property - Why Does the State Have My Money?

You've probably seen it somewhere. Maybe one of your friends posted it on social media. Perhaps you saw an article about it. The state you live or lived in just might have some money or other property that belongs to you – unclaimed property. I thought I’d put together a brief Q&A to highlight the major points of what unclaimed property is and how it works.

What is unclaimed property? It can be things such as money (cash or checks), investments, and tangible items that didn’t make it to their rightful owner.

How did the state end up with it? All 50 states have unclaimed property laws on their books. Businesses are required to report unclaimed property on a form prescribed by the state. They have to list each item along with pertinent information such as the rightful owner’s name, last known address, social security number, description of unclaimed property, etc. Examples of items include uncashed checks, abandoned safe deposit box contents, and abandoned bank accounts with a balance. They submit the form along with remittance of the total value of the abandoned property. If the item is tangible, it’s surrendered to the state. The state now has the money or tangible item.

When does a business have to report an item as unclaimed? It depends on the state and the item. For Arizona, a check is considered unclaimed if it hasn’t been cashed for 1 year. Safe deposit box items are deemed abandoned if the owner doesn’t claim the items 3 years after the lease period on the safe deposit box ended. Check with your respective state’s laws for their “presumptions of abandonment”.

How does the state ensure businesses are reporting unclaimed property? Not too long ago, the answer to this question would be, “Not much”. If you think about it, it would take nothing short of an audit of EVERY business in the state to determine compliance. That’s a lot of manpower. So, audits are selective. Businesses that have never filed an unclaimed property report, especially established businesses, raise a red flag to the state. Many states have also imposed severe penalties for noncompliance – so severe that it’s in the organization’s best interest to file. It’s not a perfect, fool-proof system, but it’s an improvement.

How do I find out if I have any unclaimed property? Go to www.missingmoney.com. It’s a centralized website where you can search multiple states’ databases for unclaimed property. Not every state participates, but the site gives you links to the non-participating states’ unclaimed property websites.

I have property to claim. What’s next? Complete the claim form provided by the state that has your property and follow any instructions that come with it. You might be required to submit additional documentation. The Missing Money website has all the resources you need to help you get your property back.

Preparing for the Worst

It's a difficult topic to discuss - a sudden, unexpected, and premature death. I’m writing this article to specifically address the issue of preparing members of the household who don’t manage the finances who, suddenly, have to manage them due to the death of the person who did. It could be a spouse, sibling, parent, child, friend, or anyone for that matter. It’s hard enough to deal with the grief and loss. It’s even harder to deal with if the electric company cuts your power due to an unpaid bill or collectors start harassing you for debts you’re not intimately familiar with.

I manage the household finances. Although my husband is perfectly capable of doing it, he gladly lets me since I enjoy it. I’m an accountant, after all. But, I started thinking, “What if something happened to me?” “Would he know what to do?” He’s originally from South Africa so things like Social Security are a new concept to him. It’s so hard to think about, but I decided I needed to do something that would help him get through that possibility. Here’s what I did.

Basic Information. I put together a spreadsheet that centralizes all the information my husband would need to know about me and the household bills along with a handful of general instructions. This includes the following:

• Reminding him to not make any major financial decisions for 6 months, like selling the house
• Instructing him to collect the life insurance proceeds and not let the insurance company convince him to buy another policy
• Instructing him to get 20 to 25 copies of my death certificate
• Basic personal information (date of birth, place of birth, social security number)
• Life insurance information (name, phone number, and address of insurance company; policy number; policy value) to get the claim started
• Social Security Administration phone number to apply for surviving spouse benefits
• Information such as phone numbers and account/policy numbers for home-related bills (electric, gas, internet, cable, mortgage)
• Information relating to vehicles (where the titles are located; insurance company name, phone number, and policy number)
• All bank, credit card, and consumer loan information (financial institution name, phone number, and account number)
• Things to cancel because they’re relevant only to me (e.g. iTunes, eBay, Paypal, Amazon)
• Board of Accountancy phone number (to inactivate my CPA license)

Online Information. On the second tab of this spreadsheet, I listed every online account I have so my husband can log in and make changes or inactivate the account. It has a link to the login page and information such as username, password, security question answers, and a description of what the account is if it’s not obvious. The most important one is my e-mail account. Since we’re paperless, we literally get no bills in the mail. They all go to my e-mail. If he doesn’t have access to that, he’s a goner. Alternatively, he can log into each account and change the delivery option from paperless to regular mail.

Other Tips. Although my husband and I have joint bank accounts and the mortgage is in both of our names, not all the bills have both our names on them. In cases like that, I made sure to add his name to the “authorized person” list where he can call and the company will speak to him about the account. I wanted to ensure that it will be easy to access everything with minimal hassle. Also, because we’re paperless, I’ve saved every document you can think of on one memory stick. So, if I missed anything on the spreadsheet, there’s no doubt a document somewhere on that memory stick that will cover those gaps.

Final Thoughts. I hope telling you what I did gives you a good general framework to help you prepare a “what if” document that is suited to your personal situation and structure. This is the way I think about it. People are grief-stricken when a loved one passes away. They don’t think straight. It’s difficult to think. Tasks that are easy seem monumental. The last thing they want to do is go through file cabinets, drawers, closets, and wherever else to compile all the information they need just to keep the lights on. Make it easy on them. Preparing a “what if” document will truly be a gift.