Every state, as well as the District of Columbia, has a treasury that operates an unclaimed property fund. The money that sits in these accounts comes from old bank accounts, monies from insurance policies, stocks, etc., left by people who’ve forgotten about them or are unaware that they received a refund from a business.
Even politicians have money in unclaimed funds. Recently, the New York Daily News reported that Mayor Bill de Blasio has two records of unclaimed property — one from Group Health Inc and the other from AT&T. With a schedule as busy as Mayor de Blasio’s, it may not be that difficult to forget you have unclaimed funds somewhere.
Unclaimed funds from insurance
When a person dies and no one submits the life insurance claim, insurance companies must turn over the money to their state treasury. In Pennsylvania, Treasurer Rob McCord estimates that private insurance companies have returned more than $532 million in funds since 2009; not all from insurance claims, but such claims contribute heavily to the state’s fund.
Even after returning millions of dollars to the rightful owners, Pennsylvania still reported more than $2 billion left in unclaimed funds.
In every scenario, the owners of the funds do not benefit from the money at all. In fact, the state of Pennsylvania generated $617 million in interest as a result of the money sitting there in the hands of the state. The interest is put to a variety of uses, such as education, corrections, public assistance, etc.
Unclaimed money at the federal level
Similarly, the IRS reports that it holds $760 million in unclaimed tax refunds from 2010. Although this money is different from unclaimed property held by a state’s treasury department, it’s still money on the table.
The IRS estimates that the average unclaimed refund is $571. Most of the unclaimed funds belong to taxpayers from California and Texas. According to the IRS, the average estimated unclaimed refund for California and Texas is $518 and $578, respectively.
The deadline to file a 2010 tax return and receive the refund is this April 15.
So where are the rightful owners?
Many people haven’t a clue that their state treasury holds unclaimed money that’s rightfully theirs, and wouldn’t know where to start to claim the funds. Some states have launched a campaign to inform people about their waiting money.
In most cases, the process is simple. Each treasury department generally has a website where people can input their basic information and determine whether they have money waiting to be claimed.
The basic search often consists of typing a name into the system. If property is located, a few forms and proper identification are required to claim the property.
Allowing money to earn interest for others isn’t a good strategy for saving and building wealth. Taking the time to call the treasury or log on to the website will start the process of getting your money returned.
Anyone can do the search for someone else and inform that person whether he or she has unclaimed property. Of course, only the owner can claim the property, but informing family members that they have unclaimed property can be a loving gesture.