Estate Planner Jul-Aug 1997
Over the years, U.S. residents have abandoned tangible and intangible property valued at billions of dollars. State unclaimed-property laws, traditionally called “escheat,” empower states (or other governmental units) to take title to, or claim custody of, property that has remained unclaimed or dormant for a period of time and, therefore, is presumed abandoned. As an heir, you may be entitled to lost treasures you don’t know about.
Finding the Treasure Map
Generally the burden is on the holder or custodian of property to report its abandonment and meet corresponding notice and publication requirements. Newspapers regularly publish such lists, so it may be worthwhile to review lists that appear in states where your relatives have resided. Look for your own last name, your or your spouse’s maiden name, your mother’s maiden name and your spouse’s mother’s maiden name to determine if the state is holding property to which you may have a claim. You also may learn of escheated property when the executor of a relative’s estate discovers evidence of escheated property, such as old uncashed dividend checks or unclaimed redemption proceeds, and contacts you.
Recovering the Treasure Chest
If you believe you have a claim to property that may have escheated to the state, contact the state treasurer to determine what recovery procedures are available. In general, the law provides a procedure to make a claim to retrieve the property.
However, the first hurdle often is determining to just what state the property escheated. Several states may claim custody of unclaimed property based on jurisdiction over the corporate issuer or holder of the property.
For example, if unclaimed intangible property, such as corporate stock, is abandoned, the stock might be covered under the law of the state where the company was incorporated, the state where the corporate headquarters was located or a state doing significant business with the corporation. Under the federal Uniform Unclaimed Property Act, and several state statutes, unclaimed intangible property is payable to the state of the last known address of the owner. Thus, that is the first place to look. If the owner has moved often, it may be necessary to check several states.
Don’t Make Your Heirs Go on a Treasure Hunt
Finding and retrieving escheated property to which you have a claim can be exciting, but wouldn’t you rather have had the property sooner? Make sure that your heirs don’t have to go through the escheat property reclamation process. Keep close tabs on all of your property and write a will or create a living trust to ensure that your estate is passed to your heirs as you wish.
What Is Abandonment?
At what point an asset escheats to the government varies by state and may depend on the type of property that has been abandoned. Under the federal Uniform Unclaimed Property Act, abandonment is presumed in many situations, such as when:
- Money has been held in a savings account with no activity for five years,
- Travelers checks have been unused for 15 years,
- Intangible assets from the dissolution of a business association have not been claimed by the owner within one year after the final distribution date,
- An employer holds funds for an employee’s benefit that the employee fails to claim when he or she leaves the job, and
- An individual dies intestate and those around him or her know of no heirs.