Here’s How to Keep Your State from Taking Your Money

Hidden within the layers of bureaucracy of every state government lies the office of unclaimed property. This office serves at the pleasure of both the state treasurer and chief financial officer and is responsible for carrying out the process of escheatment. Escheatment refers to an archaic process whereby the title of financial assets such as bank deposits, retirement accounts, security deposits, pension checks, tax refunds, uncashed paychecks, insurance policies, and orphaned safe deposit boxes that have been dormant for some time are transferred to a state authority.

When pressed on this issue, state officials often explain that the escheatment process keeps corporations from turning one’s forgetfulness into their profit. It can be argued, however, that states are guilty of the same. Combined, the 50 states take in roughly $8 billion per year in unclaimed property, and about two thirds of that stays unclaimed. To put it in perspective, escheatment is the 5th largest source of revenue in California and the 3rd largest source of revenue in Delaware.

Unclaimed-property divisions turn over the amount collected each year to the state treasurer, and the underlying value of the property then becomes a liability on the books and records of the state. Through escheatment, the state holds money until it is claimed — however long that may be. Most states keep unclaimed money in a general fund where it is pooled with other revenue that the treasurer invests on behalf of the state.

All states require financial institutions, including brokerage firms, to report when personal property has been abandoned or unclaimed after a period specified by state law. Each state is different, but the time a person is given to restore an account from dormant status can range from as little as three years to as long as seven years. Financial institutions with such dormant accounts are required by law to send reminders and issue written notices to the address on file to help locate the owners of these assets before transferring the title to the state under escheat law.

Before a brokerage account can be considered abandoned or unclaimed, the institution must make a diligent effort to try and locate its rightful owner. If the firm is unable to do so, and the account has remained inactive for the period specified by the state, the firm must report the account to the state where the account is held. The state then claims the account and becomes the owner of the assets contained within it.

The intention is to allow the rightful owner to reclaim their property since, in most cases, escheatment is revocable. However, time is of the essence to anyone seeking to reclaim escheated investments since many states can sell the securities and spend the proceeds. Once that happens, the state is only required to return the cash proceeds on the date of sale – not what the stock is worth on the day the account is reclaimed. This cash payout also does not include any dividends or interest the account holder would have been entitled to if not for escheatment.

Every state maintains an online registry of dormant assets. Now, thanks in large part to technology that makes it easier for people to file claims, states are becoming more proactive in trying to reunite citizens with their money. For small sums of money with clear ownership that would otherwise go unclaimed, some states reach out to potential claimants proactively.

What Can You Do?

Check with every state you have ever worked and lived in to be sure you are not missing out on money owed.

Since assets are continually sent to each state’s unclaimed-property divisions, be sure to search your name annually by visiting and, which both maintain information regarding missing property for most states. Some larger states, like California, are not part of these aggregation initiatives. However, these websites offer direct access to the state treasurers’ official unclaimed property websites for all 50 states.

When searching online databases, start by entering your first and last name. If your first search does not produce any results, try alternate spellings. People whose names are commonly misspelled, who have changed names, or who move often should also enter those combinations as part of an advanced search.

States take into consideration the possibility of identity theft with online claims, but most rely on advanced verification tools to minimize the likelihood of fraudulent claims. However, it is still important to be wary of third-party entities who offer to help claim property for a fee; states do not charge any fees to claim property.

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The information provided is for educational and informational purposes only, does not constitute investment advice, and should not be relied upon as such. It should not be considered a solicitation to buy or an offer to sell a security. The views expressed in this commentary are subject to change based on market and other conditions. This writing may contain statements that may be deemed forward‐looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur. Be sure to consult with your tax and legal advisors before taking any action that could have tax consequences. Investments in securities and insurance products are: NOT FDIC-INSURED | NOT BANK-GUARANTEED | MAY LOSE VALUE

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