Every state has laws about Unclaimed Property. These various laws specify the definition of unclaimed property, how it should be treated, and how to reunite it with the rightful owners.
Generally speaking, unclaimed property is defined as property owed to another that remains unclaimed by the owner after a specified period. In other words, it is property that has been deemed abandoned by the rightful owner pursuant to the state’s laws after a certain period of time has passed (e.g., 3-5 years). How does this work? For example, your Aunt Sally purchases a gift card for you from a national retailer. You are very appreciative of the gift; you thank her, and put it away in a special drawer in your house to reserve it for a special occasion. As time passes, you forget about the gift card and it mistakenly gets thrown away.
Examples of Unclaimed Property
- Inactive savings and checking accounts
- Forgotten telephone or utility deposits
- Un-cashed checks (e.g., payroll, accounts payable vendor checks)
- Un-cashed dividend checks
- Inactive stocks and bonds
- Tax Refunds
- Travelers’ checks or money orders
Most states will require the national retailer to report the gift card as abandoned after the statutory period has passed if it is still unused. Once it is deemed abandoned, the holder has an obligation to report the unclaimed property to the state along with the owner’s name, last known address, and other information.
Who is a holder? States typically define the holder to be: in possession of property belonging to another, a trustee, or an individual who is obligated to pay property to the owner. The State of Delaware defines a holder as “[a]ny person having possession, custody or control of the property of another person and includes a post office, a depository…a trustee…a public utility…and every other legal entity incorporated or created under the laws of this State or doing business in this State.” 12 Del. C. 1953 § 1198(7).
Where does the holder report the unclaimed property? In Texas v. New Jersey, 379 U.S. 674 (1965), the U.S. Supreme Court articulated a two-prong priority scheme. Once property that is being held by a Holder is “presumed abandoned,” and the owner cannot be located, the Holder must report and remit it to:
- State of last known address of the owner, based on Holder’s books and records
- State of Holder’s incorporation, if the property owner is unknown or Holder has no record of an address for the property owner, or if first priority state “does not provide for” escheat of the property
Unclaimed property laws serve to protect the consumer by attempting to reunite the property with the rightful owner and by enforcing the rights of the owners. The State does not assume ownership of the property. Rather, the State serves as custodian of the property until the rightful owner or heir of the owner claims it. For instance, in Florida the funds are deposited into the State’s School Fund and are used to support the public schools. In Connecticut, the funds are deposited into the State’s General Fund and are held in trust until the rightful owner claims the funds. Most States prefer to hold onto the unclaimed property rather than let the original company or institution that initially held the funds keep it. If there is a windfall (i.e. the property is never claimed), the States want to be in possession of the property to use it for the public good.
Prior to reporting and sending the funds to the State, the holders are required to perform due diligence to attempt to locate the rightful owner. The due diligence process gives the owner another chance to claim the property before it is sent to the state. Only if the rightful owner cannot be found after the diligence process, then the holder must report and remit the funds to either the State of last known address of the owner or to the state of incorporation of the holder if the last known address is not known.
How to Find Your Unclaimed Property
To see if you or your loved ones have any unclaimed property visit: www.unclaimed.org or www.missingmoney.com; select your state of residence; input your identifying information and see if anything comes up. If multiple entries appear that are similar or identical to your name, check to see if the address listed for the individual matches your current or old address. If it does, then you most likely have property within that State that should be claimed! Follow the directions listed on your state’s unclaimed property website to claim the property. You will need to submit proof that you are the rightful owner or heir of the rightful owner.
For more information regarding unclaimed property or real estate matters, contact St. Louis Law, P.A. at 954-745-4665 or email us at email@example.com.