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What Happens to a Person's Unclaimed Funds?



What Are Unclaimed Funds?

Funds that belong to parties that are currently in the possession of a state unclaimed property office or state escheator are considered lost money. The amount of funds at issue in such a situation can be staggering, sometimes several billions. Millions of people, living and dead, are the rightful owners of such unclaimed funds.

How Is Money or Property Lost?

The majority of unclaimed property is abandoned due to a move of the owner with a resulting address change, a name change from the owner's marriage or divorce, or the owner's death. In the instance of death, the estate may be unaware of the particular funds at issue, or perhaps the owner's heirs were not able to be located. In some instances, the owner might know about the particular asset but not realize it has been abandoned and is currently in the state's possession as a result of being turned over.

Common examples of lost property include:

  • forgotten security deposits after a move
  • refund checks from utility companies or deposit refunds when no forwarding address was provided to the companies
  • stock or mutual fund dividend checks that are addressed to an incorrect entity and/or wrong location
  • transfer of money to a new bank and forgotten account or safe deposit box at prior bank
  • forgotten money left in a checking or other account at a prior bank
  • inactive certificate of deposit with a bank that has not been active for five or more years, has rolled over, and is considered abandoned
  • death of distant relative who had no will, forcing the courts to settle the estate
  • insurance company delay in sending a life insurance policy proceeds check
  • demutualization of a life insurance company for a relative who was a policyholder but left no current address for the insurance company
  • forgotten money owed to a party by other parties or entities.

What Happens to Unclaimed Property?

Each U.S. state has laws in place to govern unclaimed property. Those laws determine which money, property, and assets are deemed abandoned after a set period of inactive time (usually three to five years). Vendors, creditors, and other authorities holding those funds during that period of inactivity are directed to attempt to return the property to its original owners, if at all possible. If those return efforts fail, those entities in possession of the unclaimed or abandoned property are permitted to release the property to the state's abandoned or unclaimed property office. Those offices attempt to find the rightful owners through newspaper publications, advertisements, and tracing efforts.

Time Limits for Making Property Claims

In most jurisdictions, there are no time limits for making claims to property if you are the rightful owner. It can take 50 years to claim your unclaimed property from the state office. Some states have time limits but most do not.

What Happens if the Unclaimed Property Owner Is Deceased?

If the owner of the unclaimed property at issue is deceased, then that party's surviving relatives are permitted to file for the return of the unclaimed or abandoned property.

How Can Investigate if You or a Relative Has Unclaimed Funds?

Contact (in writing or by phone) the unclaimed property office in each and every state in which you have resided, or in which your deceased relative lived. It is a prudent practice to check with those same offices approximately every five years. You will be required to show or provide certain biographical information about yourself or the person for whom you claim to be a legal beneficiary. In the latter instance, a copy of a will likely suffices. The unclaimed property office will then perform a search in its database of available unclaimed property to determine if there is a match for you.