Unclaimed Property: Where does it go?
There is unclaimed funds and property in every state in the country. There are laws on the books for how all types of unclaimed funds and property is to be handled by the various companies that are holding them.
These assets are to be considered lost or abandoned (usually from inactivity) after three to five years. During this time, these companies and businesses are supposed to make an effort to return these assets to their rightful owners. After this period of time expires, they are then to turn over the funds and property to the state’s unclaimed property office or appropriate agency.
In the U.S. Supreme Court decision (Texas vs. New Jersey, 379 US 674, 1965), “Jurisdiction to escheat abandoned intangible personal property lies in the State of the creditor's last known address on the debtor's books and records or, absent such address or an escheat law, in the State of corporate domicile -- but subject to later escheat to the former State if it proves such an address to be within its borders and provides for escheat of such property. Pp. .”
What this says is that the unclaimed funds and/or property is returned to the state of the property owner's last known address. If an address is unknown, it is returned to the state where the business holding the funds is incorporated.
A major flaw with this is that in many of the unclaimed or abandoned property cases, the individual(s) that are said cannot be found have been at the same address for many years. In one case, the Claimant was at the same address for 34 years in California. How do you not find or notify this person when they haven’t moved in so long?
The state’s unclaimed property office attempts to find the rightful owners by sometimes placing advertisements in newspapers and setting up at county and state fairs trying to locate the owners of lost, abandoned or unclaimed funds.
Depending upon the state depends on whether or not there is a time limit on claiming your funds or property. Some unclaimed funds and/or property that have been deemed lost or abandoned has been reunited with its rightful owners 30, 40, and even 50 years after it was turned over to the state. In other cases, states keep escheated funds after 3,5, and 7 years.
Comments (2)
Hi Treathyl, You are correct in seeing the word "cheat" in there. I sometimes wonder if that was done on purpose. There are many people that have been at the same address for numerous years as well as some very famous people that are owed money. Many of these people are easy to find. The state's in many cases, don't want to find these people because if the funds are not claimed, they can escheat the money and keep it. This is how many of the states balance their budget and try to keep their deficit from getting too far out of control.
Jeff Richman, about 13 years ago
"In other cases, states keep escheated funds after 3,5, and 7 years." I'm not trying to be critical or cynical. Really I'm not. But the first time I saw the word "escheat", all I saw was "cheat"! Which is why I looked at it again and went to the dictionary to figure out what it meant. Because it is a mystery to me, how a person can be in the same place for 30 years and an entity legally required to seek them out because THEY NEED TO FIND THEM can't find them (???). How many people do you know named "Treathyl"? I'm either in the social security death index or I'm alive!!!
Treathyl Fox, about 13 years ago