Unclaimed Funds are one of the many reasons for a proper estate plan and to advise one’s family or loved ones accordingly.
Unclaimed Funds go to the state (escheat) and may include money and securities, unclaimed property includes tangible property such as watches, jewelry, coins, currency, stamps, historical items, and other miscellaneous articles from abandoned safe deposit boxes. Escheat is the right of a government to take ownership of estate assets or unclaimed property in the event there are no heirs or beneficiaries. Escheat rights can also be granted when assets are unclaimed for a prolonged period. These situations can also be referred to as bona vacantia or simply unclaimed property. Financial institutions can hand over unclaimed property to their state, which includes bank accounts, assets, or any other property unclaimed for an extended period.
More than $58 billion dollars of assets have been escheated, or confiscated, by state governments in the US, and are just sitting in state funds, awaiting retrieval. There may be more which have yet to be recognized. The State of Florida, for example, currently holds an estimated $2 billion dollars’ worth of unclaimed money that can be claimed by legal owners at any time.
Florida and US residents forget about property and assets they may own. Additionally, people may not know that their loved ones have or had assets and, even if they were told, they may have forgotten them as well.
There are a number of free and paid groups which assist in finding money and assets which was lost or forgotten.
These assets are called “Unclaimed Property.” A non-profit organization called NAUPA, the National Association of Unclaimed Property Administrators, is charged with helping oversee unclaimed property. NAUPA has members from every state in the US, including DC. Its role is to set and foster the highest standards, professionalism, and best practices in raising awareness of, protecting, and returning unclaimed property to its rightful owners.
According to NAUPA, unclaimed property is defined as “accounts in financial institutions and companies, which have had no activity generated or contact with the owner for one year or a longer period.” Various states set different periods of time before escheating property. The state of Florida has a five-year holding period on most assets. Florida’s Chief Financial Officer, Jimmy Patronis, has said “…one in five Floridians has unclaimed property waiting for them.“ That is one of the bases for the CFO launching the “Florida Treasure Hunt” to spread the word and assist residents or their surviving families recover cash for which they may not even be aware. Last year, Florida paid out $349 million dollars in missing money.
Again, various forms of unclaimed property can consist of assets such as bank accounts, uncashed checks, money orders, gift certificates, stock and dividends or court funds, insurance policies and property from brokers/dealers, credit balances, payroll checks or bond interest, utility deposits, refunds, traveler’s checks, trust distributions, insurance refunds, annuities, certificates of deposit, bearer bonds, customer overpayments and contents of safe deposit boxes, among others.
Unclaimed property held by state governments does not include contents in storage units, which get sold if abandoned. It also does not include items that have been “hidden” in a home, like dollar bills inside books or under mattresses, or jewelry, gold bars, coins or other assets which have been hidden.
The most common reason abandoned property is turned over to the state and becomes unclaimed property is when a resident of that state:
- Moves without notifying every business contact;
- Forgets about accounts they may still have open;
- Has checks that have been lost in the mail, uncashed or put in a drawer and forgotten; and
- Has no account information or process for notifying heirs upon his or her death.
There is currently no statute of limitation on unclaimed property. One can claim and recover property that was escheated 50+ years ago and even unclaimed property of deceased relatives if one is a lawful heir. Further, depending on the state, it may include interest. However, Florida is not one of them.
Finding out if a loved one has unclaimed property is easier nowadays. People can check to see if they have any awaiting them, by going to NAUPA’s site, www.MissingMoney.com, or a free site sponsored by NAUPA, or to www.unclaimed.org. The databases that house unclaimed property records are located and maintained by each state, not by the two stated sites.
Legitimate proof of one’s right to claim unclaimed property must be presented to make the claim.
To date, the largest unclaimed property recipient was a woman in Kansas City, Missouri, in 2011, for $6.1 million dollars, from a stock that her ancestors had invested in many years prior. The stock had been lost in passing it down from one generation to another.
HOWEVER, doing a proper estate plan and advising one’s family, loved ones, heirs and/or beneficiaries can go a long way in avoiding the foregoing from occurring.
The ability to know with certainty what will happen to one’s assets after they pass away is a primary benefit of creating an estate plan. When all goes as planned, a deceased party’s estate assets are distributed precisely as the terms of their Last Will & Testament and/or Trust and/or Lady Bird Deed, among other properly prepared documents, dictate.
The foregoing is a very brief and general overview of the benefits of having a proper estate plan prepared and advising loved ones.
If you have any additional Questions regarding the foregoing or have any legal issue or concern, please contact the law firm of CASERTA & SPIRITI in Miami Lakes, Florida.