Do you know where your money is? Even those consumers meticulous about their budgets could have missing cash lingering in a state property fund.
States are collectively holding on to $41.7 billion in unclaimed assets, including dormant bank accounts, stock splits, life insurance payouts, gift cards and uncashed payroll checks, according to the National Association of Unclaimed Property Administrators (NAUPA), a collective of state officials. In 2010, the association estimated, the value of property being held was $32.8 billion.
"This is an area that's growing," said Joshua Joyce, administrator of unclaimed property at the Arizona Department of Revenue. He also serves as senior vice president of NAUPA. "It's still surprising how many people don't know that government programs exist."
The big hurdle is that most people assume they don't have anything to claim. "Everybody thinks it doesn't apply to them," said Mary Pitman, author of "The Little Book of Missing Money." But it's incredibly easy for money to end up in the hands of the state, she said, and some states have been more aggressive about snagging dormant funds.
Over the past two years, for example, Minnesota has reached six settlement agreements with insurers to track down residents owed unpaid insurance policies, annuity contracts and retained asset accounts. The agreements have resulted in $30 million in new insurance payments, they said, with unclaimed assets now residing in the state's unclaimed property fund.
Most unclaimed funds go missing in the first place due to simple lost contact — moving without telling financial institutions your new address, or failing to respond to mailed notices. That can set the dormancy clock running even on assets you're aware of, like safe deposit boxes, mutual fund shares and pensions from former employers, said Joyce. It also results in plenty of surprise lost funds, such as utility deposits and last paychecks.
Poor estate planning is another common generator of lost money. "If the family members didn't know where all the assets were spread out ... they wouldn't have any way to contact those companies," he said.
The best place to start a search is MissingMoney.com, said Pitman. "It's free to search, free to claim," she said. (Not all states participate, but the site lists contact information and links to the state-run databases of the 11 that don't.) NAUPA's site, Unclaimed.org, also lists other databases that may yield results, she said, like the Pension Benefit Guaranty Corp.'s $280 million in forgotten pensions from closed or taken-over plans.
State laws vary regarding how quickly unclaimed funds end up in the state fund, so it's worth checking regularly. There's no statute of limitations — even heirs can collect assets, with the right proof of ownership, said Pitman.
Still, it's better to keep tabs so funds don't linger too long with the state. At some point, again depending on the state, property such as safe deposit box contents, stock shares and other tangible property can be traded or sold for cash, said Joyce. (In Arizona, for example, the state is required to hold such items for three years before liquidation, he said.)
"Sometimes that actually works out tremendously for people, depending on the market conditions," he said. But it could also mean that forgotten stock is much less valuable, or that an heir would receive cash rather than a family heirloom.
Keep good records of where all your assets are located, said Dustin Obhas, a certified financial planner based in Beverly Hills, California. That's important for both online-only assets like e-savings accounts or a PayPal account (for which heirs would need an account number and login details), and physical assets like old stock certificates or a safe deposit box (for which they need to know the actual location).
"That way you're not leaving it up to your kids to go hunting through your house," he said. "Go through an inventory of everything you have so they're aware."
Listing beneficiaries on insurance policies, retirement accounts and other assets is another way to prevent loss, said Obhas. "It's an easy way to say, 'If something were to happen to me, this is who I want it to go to,'" he said.