Unclaimed Property – What is it, Where to find it, and How it Impacts Estate Administration
Regardless of how careful we are with our finances, it is possible for money to be forgotten or abandoned. Some examples of this include utility deposits, credit balances, unused gift certificates, banks accounts, and more! Across the country, there are billions of dollars in unclaimed property being held by the state and federal government. Fortunately, it is often possible to locate this property and get it back. It is equally important for estate administrators or family members to look for unclaimed property so that the property goes to the intended beneficiaries.
What Is Unclaimed Property?
Throughout our lives, certain events commonly occur—moves, marriages, divorces, or deaths—that could result in property being unintentionally lost. For example, a move results in a change of address and marriages or divorces frequently involve changes of name. In the case of the death of a family member, the heirs or beneficiaries may not have complete knowledge of the extent or location of their loved ones’ money and property.
After three to five years, depending upon the state, if the property, account, or money is not claimed, the business or organization is required to turn it over to the appropriate state agency (typically, in the state of the owner’s last known address). The legal term for this transfer is escheatment. The amount of time after which the money or property must be transferred to the state may vary depending upon the type of property involved. For example, the unclaimed funds in a bank account may be required to be turned over to the state after three years, but unclaimed wages or salaries are frequently mandated to be handed over after only one year. The state will then hold the property until the owner files a claim to obtain it.
How Can You Find It?
There are some helpful places to look for unclaimed property held not only by the state government, but also by the federal government. The National Association of Unclaimed Property Administrators provides the ability to perform searches for multiple states at a time, as well as to perform national searches.
Note: Legitimate asset locators can help you find unclaimed property but may charge very high fees. There are also some scams in which individuals contact victims using email, letters, or phone calls asserting that the victim is entitled to valuable unclaimed property in an effort to obtain a fee or personal information. It is important to check with your attorney before paying any fees or signing a contract with anyone purporting to be an asset locator.
How Should This Affect My Estate Planning?
An important part of estate planning is creating a comprehensive list or inventory of all of your money and property. This inventory will enable you to consider who you would like to receive your money and property. It will also help ensure that none of your accounts or property ends up as unclaimed property. You should review and update your inventory on a regular basis with your estate planning attorney and make sure that you provide copies of it to trusted individuals.
What If the Owner Is Deceased?
Because so many people have unclaimed property, it is always prudent for the personal representative of an estate to check with the appropriate state agency to ascertain whether the deceased person had any unclaimed property which has been turned over to the state.
A personal representative appointed by the probate court or an heir is authorized to file a claim for any money or property on behalf of the deceased owner’s estate. As in the case of an owner who is seeking to claim his or her own property, the personal representative or heir will typically need to provide the owner’s death certificate and a claim form, plus one or more of the following:
- a letter or certificate of qualification from the probate court
- photo identification
- proof of the estate’s federal tax identification number if one was required
- the owner’s obituary if the owner died without a will; proof the will was probated if the owner died with a will
- proof of the owner’s address if the property being claimed did not contain a social security number
- a copy of the court-ordered distribution of the deceased owner’s estate
- the owner’s will and/or trust agreement
State law varies widely regarding the requirements for claiming the property of a deceased owner, so it is important for personal representatives and heirs to check with their probate attorney if they need assistance compiling the necessary documentation. Even if an estate has already been closed, there typically is no statute of limitations that would preclude an heir from seeking unclaimed property belonging to a deceased family member even many years later. The heir must simply provide the required documentation to the state.
Contact us today if you have questions or need help locating unclaimed funds!
(614) 429-1053