Sometimes when people move from one city or state to another, they lose track of financial assets. In some cases, safe deposit boxes, savings accounts and deposits on utilities are forgotten. All states have laws that are called escheatment laws that govern how a company must handle these assets.
Every company that holds any financial assets on behalf of another person is required to attempt to contact that person by mail for a specified number of years per the individual state guidelines. These can range in time from three to five years and in rare instances may be even longer. Should the company not be able to reach the owner of the asset, it is then turned over to the specific state in which the consumer lived at the time they did business with the company.
What happens to assets held by the state?
Financial assets are held by most states in perpetuity. This means the rightful owner or their heirs may claim these assets at any time by proving they are either the owner or their heir. The single exception to this rule is the contents of safe deposit boxes. In a case there were physical assets, like jewelry, in a safe deposit box, the contents are auctioned off and the proceeds are held for the owner or their heir.
How to find assets the state is holding
For those who believe they may have assets turned over to the state, there is a simple way to search for these assets. The National Association of Unclaimed Property Administrators allows consumers to search by state to determine if there are assets in their own name or the name of a deceased parent or grandparent. Consumers are encouraged to check this database one or two times a year, as there are different times when companies turn assets over to the state.
What about life insurance policies?
Life insurance policies with named beneficiaries often go unclaimed for many years. In some cases, this is because the family of the decedent was unaware of the policy. State insurance commissioners generally have a record of all life insurance policies taken out in their state. The National Association of Insurance Commissioners provides contact information for each state commissioner. Anyone who has lost a loved one and believes they may have had a life insurance policy that was unclaimed is encouraged to contact them.
Each year, millions of dollars in assets are turned over to the states because they are unable to locate the rightful owners. Billions of dollars are currently being held by the states; these assets may be claimed by the owner or their heirs at any time. Those who believe they have identified an asset that rightfully belongs to them will be asked to file a claim to collect those funds. This will require providing definitive identification and in the case of a deceased owner, the heir will have to provide a death certificate as well as proof they are the new rightful owner. Many states do a very good job of publishing lists on an annual basis defining who the original owner was and providing information on how to claim that property.
Consumers can avoid having funds being escheated to the state by making sure they provide updated address information to any institution they have a financial relationship with, cashing all checks they receive immediately and making sure their family knows what they have in life insurance policies.