Unclaimed Assets

NEARLY $1 TRILLION AND GROWING: ASSETS WITH NO OWNER 

There is an estimated $90 billion dollars in unclaimed assets in North America, most of which is held by individual states and a variety of federal agencies.  Annually, this number is increasing and the amount going out is only half of what’s coming in. Some experts believe this number to be double if you include the assets that have not yet been reported. Total unclaimed assets have increased by over 50% in the past ten years. What type of assets are there?  How can you claim your share?  Finally, how can you ensure that your legacy is preserved by ensuring all the assets you have go to the right place and are not added to the ever-growing list? 

What & Why Are Assets Unclaimed 

Escheatment occurs when a financial institution, government, or company has no known address for the account holder.  The amount of time is determined by each asset type, but most must be reported and returned to the Treasurer in 3-5 years IN THE STATE OF INCORPORATION, not necessarily residency.       

Here is a list of some of the most common State claims: 

The largest state of incorporation for businesses is Delaware and California boasts the highest unclaimed assets at $9 billion. Insurance and annuity claims can require multiple state inquiries when you consider that 65% of the insurance carriers of last century have been merged, consolidated, or are not serviced by the initial producing firm. While there are specific time frames for each of the asset types to be escheated, the date the clock starts is quite vague.  It could include time after inactivity.  With cash value life insurance policies, there may be sufficient funds to keep the contract to maintain activity and not be escheated in a timely fashion.  There may be no notification of death and beneficiaries contact information may be incomplete or outdated.  Clients may not remember taking out older policies.  Clients may not remember taking out older policies from agents or advisors that changed firms or left the financial services industry.New regulations to add a Trusted Contact person and annual reporting should curtail future assets from going unclaimed, but only if complete and accurate information is available. 

Even though more than 70% of the assets to be reunited are under $100, there are still plenty of treasures to be found.  Missouri boasts the largest claim recorded at $6.1 million. Some states separate smaller vs. larger claims on their state site, which you can access via the National Association of Unclaimed Property Administrators, https://unclaimed.org, a non-profit dedicated to finding rightful owners.    

Stake Your Claim 

At the NAPUA site, you can navigate to the US map, click on the state, and you will then be navigated to the site for each state Treasurer. Sites are updated semi-annually and currently there is no time limit for assets to be claimed.  Proposed legislation may pose expirations and allow states to retain in the future. Federal assets can be researched, found and claimed at https://www.treasurydirect.gov/govt/reports/tma/unclaimed.htm - Federal unclaimed assets are managed by agencies. 

You can file a claim for yourself, as an heir with either a closed or open probate, or as the legal representative or authorized person for a current or former business.  There are also fee-based representatives that charge to research and claim on your behalf.  The states and NAUPA both remind consumers that the search and claim process is FREE.  At nearly $1 trillion, there will be opportunists and lures for elder financial fraud.  Remind your clients not to sign or give POA to those outside their trusted financial and legal team. 

Be sure to search all name variations held through your/their lifetime and multiple states. 

Claiming Requirements 

Claiming can be as simple as providing identifying information and an online affidavit to obtaining legal documents for prior relatives including birth certificates, death certificates, proof of prior address, marriage certificates, or proof of prior employment.  The higher the claim, the longer it can take.  Most processes start online at the state site and will provide you with the necessary documentation to claim.  I have seen claims settle in as little as 2 weeks to over 2 years.   

Legacy Solutions 

1. Maintain a comprehensive, up-to-date list of your assets in one safe location. 
2. Update and review your beneficiaries annually and ensure that a Trusted Contact person is added to each account. 
3. Work with your financial planner and legal representatives to keep your data current. 
4. When reviewing old financials, identify where you may have made payments or deposits. Check the states of your current and former creditors or companies that you paid for subscriptions or monthly payments. 
5. Assist seniors by connecting them with trusted professionals - the electronic learning curve can be daunting and may be the reason unclaimed assets are increasing. 
6. Start a genealogy list of names, dates of birth/death/marriage for aging or deceased family members.   
7. Finally, be cautious and conscientious when looking for claims. Utilize your team of TRUSTED financial professionals to assist with the data needed for claims. 

Best Wishes and Happy Hunting!   

Be sure to reach out and let me know about both your successes and challenges! 

Kelly is a Wealth Advisor with Colorado Wealth Group in Denver, CO 

In addition, she is a licensed mortgage loan originator in CO with A.L.L. City Financial Group and serves as co-chair on the Women’s Estate Planning Council.  She holds a BA from the University of Denver and an MBA from Colorado State University and resides in Genesee, CO. 

Kelly L. St. George, MBA / Kelly@ColoradoWealthGroup / 303-870-7701