Wouldn’t it be nice to find $20 under the seat of your car, that’s been there for two years? Of course, it would. Discovering an asset you did not know existed, and it belongs to you, is an exciting prospect. Today’s blog will explore how you may find your own unclaimed property and, what to do with unclaimed property that belongs to your clients/customers.
Unclaimed property is a financial asset with no activity generated or any contact with the owner for one year or longer. Unclaimed property, also called escheated financial assets, include:
- savings accounts
- checking accounts
- stocks and bonds
- uncashed dividends, payroll checks or any other check
- tax refunds
- traveler’s checks
- trust distributions
- insurance payments or refunds
- life insurance policies
- certificates of deposit
- customer overpayments
- utility security deposits
- mineral royalty payment
- contents of safe deposit boxes
Every U.S. state and territory has programs to collect unclaimed property. Some try to find the owner. Every business is required by law to report unclaimed property annually. Unclaimed property should be reported to the State of the owner’s last-known residence, not the home State of the business.
It is free to search for unclaimed property. MissingMoney is a website endorsed by the National Association of Unclaimed Property Administrators (NAUPA). The website contains the rules for most state unclaimed property programs. There are ten states that do not have their records on MissingMoney’s website, but the NAUPA website will link you to every state’s unclaimed property program website, where you can again search for free.
Beware of businesses that say that they will conduct a search for unclaimed property in your name for a fee. These firms may have obtained owner information by using the States’ Freedom of Information Act. Do not fall for it! The search for unclaimed property is free and easy if you use one of the two links above.
Most states hold unclaimed property until the owner or heir is found. Once you file a State claim form and go through a verification process to prove your identity, states will return your property to you free of charge or for a small handling fee, depending on the state.
As a business, you are required to hold the unclaimed property for the required dormancy period. In Pennsylvania, for example, the typical dormancy period is three years. Once those three years are up, reporting the dormant accounts as income does not negate the obligation to report and deliver to the State unclaimed property. Almost every state requires a report disclosing any unclaimed property, even if there is no unclaimed property that year.
States also offer voluntary disclosure agreements to help bring companies current with their annual filing requirements. Generally, these programs waive penalties and interest. The due date for most state’s unclaimed property filings align with filing individual tax return due dates, which is generally April 15th.
Again, each state has its own program so you should check on each state’s treasury website on how to file a report and remit property if you are a holder of unclaimed property.
In short, if you are a business you should do an internal audit to check if you have any unclaimed property that needs to be reported. If you are an individual, you should type your name into one of the free websites to see what comes up. You never know what you may find!