How to claim unclaimed money without getting scammed

October 7, 2011

Nearly $33 billion in 117 million accounts. That is how much money is currently held by state treasurers and other agencies and awaiting someone to claim it, according to the National Association of Unclaimed Property Administrators (NAUPA).

Could some of it be yours?

Seth Rabinowitz, a management consultant and economist in Los Angeles, thought so. At least his mother did. She saw an advertisement about unclaimed assets in a magazine and asked her son to help her claim it.

Generally, assets held in financial accounts that the owner has not accessed, or have had no activity in over a year, are considered unclaimed assets. This includes savings or checking accounts, stocks, uncashed dividends or payroll checks, insurance payments or refunds, annuities, unredeemed gift certificates, trust distributions and contents of safe deposit boxes. One of the most common overlooked item is the security deposits required by utilities, says Ed Smith, Director of Tax and Accounting at Morrison, Brown, Argiz & Farra LLC in the private client wealth services group.

Rabinowitz’s mother grew up in Pennsylvania and her parents retired in New Jersey. So Rabinowitz did a Google search for New Jersey unclaimed assets. Together they searched the first and last name of his grandparents — plus several spelling variations of their names. Up popped more than two-dozen entries with addresses associated with them. Rabinowitz through each entry and asked whether or not his grandparents lived at each address.

“Turns out my grandfather worked at Boeing and there was some stock leftover,” says Rabinowitz. Unfortunately, he says, there are obstacles to actually claiming the money. You are required to photocopy a number of documents—some of which you may or may not have. “If someone died 20 years ago, do you have the will, death certificate, something that shows the Social Security Number… something from the probate court that is an affidavit that says you are the heir?” His mother couldn’t find this information, but she submitted some paperwork anyway. “We knew it wouldn’t be tons of money,” says Rabinowitz. But he also didn’t want the money sitting in the state treasury.

After about a month, Rabinowitz found out the amount was about $600. “We still haven’t gotten the money yet because of all the obstacles,” he says.

Clearly the process isn’t easy, but for many people, the hint of claiming thousands of dollars is worth the effort. “There is a lot of unclaimed money out there, and a lot of comes from seniors who were not very open about where they saved their money,” says Timothy Gagnon, a professor at Northeastern University. “I think the government is getting more proactive about collecting the money, but not necessarily proactive about getting it to the right owner,” he says noting that there is some information published about these funds but it is not widely read.

Still, an estimated $1.75 billion from 1.93 million accounts was returned during the 2006 fiscal year – the most recent data available, according to NAUPA. Here are search tactics that might make easier for you to find out if you’re the heir to some unclaimed funds:

 

  • Search the websites: If someone has recently died, “tell your executor to go to the unclaimed money site and run the names to see what there is,” Gagnon says. Do it annually. Just one site is multi-state: www.missingmoney.com but it only includes those participating states or provinces. Otherwise, you’ll need to search each state. NAUPA’s site is also quite informative www.unclaimedmoney.org. The site has additional links to other agencies and programs.
  • Search public records: If there was will and it was filed, then it is a matter of public record and can be found, says Beth Kaufman, an attorney with Caplin & Drysdale in Washington, DC. With elderly clients who may have had stock portfolios, Kaufman recommends contacting the registered agent.

Note that claiming unclaimed property is a do-it-yourself job. However, for those of you who don’t want to do the work, there are also companies that can do it for you. But it is a buyer-beware situation as the potential for scams and gouging are high. To avoid being defrauded, never pay upfront. Wait until after the money is recovered.

These firms will only take on cases of several thousands of dollars. The typical fee is 10 percent to 35 percent of claimed funds, says Michael Zwick, president of Assets International, a private investigation agency that specializes in locating missing heirs and other beneficiaries. “We do a lot of legwork, from finding documents, going to courthouses to go through records, going to a cemetery to look at family plots and looking at land records,” says Zwick.

Despite the time and effort, it may be worth it just to know if part of that $33 billion is yours. If not, you might at least have a good detective story to tell.

 

3 comments

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The correct link to the NAUPA site is www.unclaimed.org.
Also, when it comes to finders. most states limit what finders can charge if the listing is on the state unclaimed property site. Many also require that they not contact you unless the listing has been with the state at least 24 months.
If you get contacted by someone who wants a fee, the first thing you should do is check the state unclaimed property site. If it’s not there and your state has an income tax, check to see if you have a refund from the state or county. These listings do not appear on the state sites and are not subject to the limits on finders fees.
If you’re still coming up empty, it may be stocks. If you think that is the case, contact the transfer agent that handles the stocks. To find out who that is, go to the corporate website for the stocks and click on the Investor Relations link. You will find the name of the transfer agent there. Stock listings will eventually go to the state and then you can claim them for free.

Posted by MaryFindsMoney | Report as abusive

Also, regarding not having a social security number for someone who died long ago, you can find that info on the Social Security Death Index.
National Find Your Missing Money Day is April 16, the day after your taxes are due.
Equally important is having customer initiated contact with all your accounts at least once a year. You savings account earning interest does NOT meet the definition of “customer initiated activity.”
Log in to your account or call and make sure they have your correct address for all accounts at the financial institution. Do this at least once a year to prevent your accounts from going into the dormant status and getting turned over to the state.
Folow me on Twitter @MaryFindsMoney

Posted by MaryFindsMoney | Report as abusive

Thank you MaryFindsMoney for your extremely helpful comments. Clearly, you’ve got quite an expertise in finding unclaimed money. Our readers will certainly benefit from your tips.

Posted by ToddiGutner | Report as abusive