There was a recent announcement that in the last 12 months, there were $58 billion added to unclaimed funds. And this is not unusual – generally, over $50 billion gets added to unclaimed funds annually. NYS is currently holding over $18 billion in its state treasury alone.
What are unclaimed funds? Unclaimed funds come from abandoned property or the inability of a business that owes you money to find you.
Abandoned property is accounts that a financial institution is holding who has not heard from you in over a year. Use the example of having a savings account at the local credit union. You conduct no transactions in the account during the last 12 months. The credit union notifies you that you need to conduct a transaction in the account within the next 30 days. You fail to do so. The financial institution will now consider it abandoned property. The institution may try one or two more times to contact you. If they receive no response, they will turn the funds over to the state of the last known address of the account owner as unclaimed funds.
This abandoned property concept may include bank accounts such as savings and checking accounts in which no transactions are performed. Investment accounts have the same no-transaction criteria. In both cases, if statements are returned with no forwarding addresses, the account will be turned over to unclaimed funds.
Maybe you have a pension account at an old employer that you are waiting to turn 65 to collect. The pension fund gets sold or merged into another organization. You move one, two, or more times. Maybe you forget all about this pension. When the contact chain is broken, the institution must turn the funds over to the state of residence.
Unclaimed funds can also result from checks that were not cashed, and the individuals cannot be found. Think about possible checks that were sent and remain uncashed. For example:
- Dividend checks
- Retirement plan distribution checks
- Rebate or refund checks
- Escrow checks
- Insurance claim checks
Do you think there is no way that you have unclaimed funds? A personal example – before our marriage, my husband Lynn bought his first house from a local realtor. A year or two later, the realtor’s organization had a class action suit against them and lost. The organization was required to make a payment to each person they had held funds for during the specified period. The realtor’s organization claims they tried to find Lynn and were unable to do so. He was living in the house that he bought – at the address for the house that they sold him, but they could not “find him.” So, they turned the $18+ over to NYS unclaimed funds.
Ten or twelve years later, I first heard about unclaimed funds. I went looking and found a listing for Lynn’s name. We discovered this escrow amount for the realtor. I did not expect to find anything for either of us, but I did. Is there a possibility that you may have something odd like that out there that you are unaware of?
How do you find out if there are any funds out there for you? Go to Unclaimed.org. Input your current name and any states that you have lived in. It would help if you also tried your maiden name or any other name you have used. We often see individuals who have accounts using their middle name, a nickname, or maybe with their first initial only. If you have had accounts with misspellings in your name, I would also suggest you input those to see if anything comes up. If your parents are deceased or if you were the beneficiary of anyone else’s estate, consider entering their names and information.
If your name comes up, there will be information on how to obtain your funds. Generally, it is the completion of a form. Do not think that you need an attorney or to pay anyone to get your funds. Any organization would be happy to help you complete these forms and get these funds to you.
Maybe it will turn out to be only a few dollars like Lynn’s $18. Or – maybe it could be a $500,000 pension account that got lost like we have seen others get. Is a few minutes’ time worth seeing if there is anything out there for you and/or your loved ones?
Certainly, go to Unclaimed.org. There are a few other sites that you should consider reviewing. Search the database at ClassAction.org/settlements. There is the possibility that you are eligible for a check if you paid for a product or service that was involved in a class-action lawsuit. On the database, look for items on the list that you bought or services that you used. If you find something, follow the instructions on the site for getting your payment. Some of these may have limitations regarding the periods or models involved, so ensure that you qualify before completing paperwork.
Another possibility – are you a purchaser of lottery tickets? There are nearly $3 billion in prizes that have gone unclaimed. Some are $100 or $1000 winners, but the North American Association of State and Provincial Lotteries also notes that some are worth millions. Go through your car, your purse, your junk drawer, the area you keep your mail or other bits of paper. Find any tickets you have and scan to see if you have a winner. Typically, you only have six months to a year from the date of the drawing to claim your prize, so go on your search sooner rather than later.
Each of the federal and state governments has billions of refunds that were returned to them. Could you be due a refund from IRS, NYS, PA, or some other state? Make sure that IRS and any state government have a current address for you. With a current address, the organization will send you a refund.
If you have not filed tax returns, you have three years from the original filing date to get a return filed and claim a refund. After three years, the refund is lost. Right now, if you have not filed your 2019 or 2020 tax return, you have until April 15, 2022, to file a 2019 tax return and get your refund. None of the governments are going to notify you that they are holding a refund. They will notify you if there is a balance due. There is no statute of limitations for you to avoid paying that amount. However, a refund due you will only be available for three years.
As you have moved from a state, make sure they have your current address. File Form 8822 with the IRS or any state if they do not have their own form to make sure they have your current address.
The final note on this subject we are often asked is, are the funds taxable? The answer – it depends. If the funds would have been initially taxable, then the receipt of the funds now is taxable. If it would not have been taxable, it is not taxable now. Funds for the return of a security deposit or a rebate check would not be taxable. Funds coming from uncashed dividend checks or a retirement plan distribution would be taxable.
Take an afternoon and check the websites for yourself, a spouse, parents, children, and even grandparents. See what you can find and chase whatever cash you may be eligible for. If you are the executor or executrix of an estate, check for the deceased. We recommend that you repeat this search once a year or so. If you need some help, let us know, and we will do what we can to help.
