Piles of Money Could Be Waiting for You
Feb. 26, 2003 -- From expired gift certificates to old bank accounts, Americans are missing out on billions of dollars simply because they don't know it's there. Could a lost treasure be waiting for you to claim?
In lean economic times like these, coming into unexpected cash is reason for celebration. While the possibility always exists of finding some extra change under the cushions or some cash in your jacket pocket, there may be some truly significant money out there for your taking.
Unclaimed property refund checks are often in the $800 to $1,000 range, yet each year, states return only 4 percent of unclaimed assets to their rightful owners, since most owners don't know they have money coming.
It is very simple to find the unclaimed money that the state or federal government is waiting for you to take.
Assets Unclaimed
It's been reported that one out of eight persons in the United States is owed unclaimed money that, in total, equals between $10 billion and $20 billion.
Unclaimed property is generally defined as any financial asset that has had no activity by its owner for a period of five years or more. This includes savings accounts, safety deposit boxes, checking accounts, uncashed dividends, stocks, customer deposits or overpayments, certificates of deposit, credit balances, refunds, matured life insurance policies and uncashed death benefit checks.
For example, if you have ever moved without getting your utility deposit back or forgotten about an old checking or savings account, you are entitled to those funds from your state. Unclaimed property is normally turned over to the state or federal government by financial institutions, until the rightful recipient (you!) recovers them, or until the property is sold at auction.
Treasure Hunting
When it comes to hunting for your own potentially hidden treasures, most states have made finding and recovering unclaimed property pretty simple. Most states publish all unclaimed property in the newspaper, twice a year.
Also, many states offer free online access to property databases and even online claim forms. The National Association of Unclaimed Property Administrators (www.unclaimed.org), a nonprofit organization affiliated with the National Association of State Treasurers, is an excellent source of information on unclaimed property.
NAUPA's site links to individual state Web sites that allow you to search for your property. If your state does not offer the ability to search unclaimed property records, you should call you state treasurer's office directly and ask to speak to someone in the unclaimed property division. They may ask you to write a formal letter providing specific information, including your full name, last address and Social Security number. In Illinois, for example, you must complete a form requiring your Social Security number, proof of the original address, and your signature guaranteed by a notary public.
If the unclaimed property is not in your name, you must prove that you are the legal guardian, representative of the owner or heir to recoup it. Keep in mind, the state acts as a custodian until the rightful owner, or his or her heir, makes a claim to the assets, so the state is merely a holding place — not the owner —of your unclaimed property.
In addition, there are fee-based services that will search for assets on your behalf — often charging a fee equivalent to one-half of all your recovered assets. The Illinois State Treasurer's Office says that its Web site, and those of most states, is identical to any fee-based search company — so it is not necessary to use fee-based services.
Thinking about throwing out that expired gift certificate? Not so fast. In Illinois, for example, a retailer must report an unused gift certificate to the state treasurer's office if the certificate is not redeemed within five years. Under state law, the unclaimed asset of the gift certificate is yours to recoup because the law prevents the retailer from receiving a "windfall" of your money. Basically, it is against the law for the retailer to take money without offering a service or goods in return. Before you throw out your old "expired" gift certificate, call the retailer or your state treasurer's office to find how you can redeem the funds.
Check With The Feds
When it comes to federal savings bonds, government-guaranteed mortgage insurance refunds and pensions, the federal government does not maintain the same type of unfound money holding pens that states do. As such, in order to find unclaimed money, you need to contact the individual government agency that you believe owes you money.
The IRSAccording to the Internal Revenue Service, more than $2.5 billion in unclaimed refunds are awaiting about 1.9 million people who failed to file a 1999 income tax return. However, in order to collect the money, a return must be filed with an IRS office no later than April 15, 2003. The IRS estimates that about half of those who could claim refunds would receive more than $511. Some individuals may have had taxes withheld from their wages but had too little income to require filing a tax return. Others may not have had any tax withheld but would be eligible for the refundable Earned Income Tax Credit.
In cases where a return was not filed, the law provides most taxpayers with a three-year window of opportunity for claiming a refund. If no return is filed to claim the refund within three years, the money becomes property of the U.S. Treasury. For 1999 returns, the window closes on April 15, 2003. The law requires that these returns be properly addressed, postmarked and mailed by that date. There is no penalty assessed by the IRS for filing a late return qualifying for a refund.
The IRS provides specific information on its Web site on how to obtain a past refund. You can also try its toll-free phone number, (800) 829-1040.
More than $8 billion worth of matured savings bonds have never been cashed. You can bring your uncashed savings bonds to your local bank, which will cash them in for you. If you think you have lost a savings bond and have a record of the serial numbers, the Bureau of Public Debt (www.publicdebt.treas.gov)can look up its status. Also, bonds that are lost, stolen, mutilated or destroyed can be replaced free of charge as long as the Bureau of the Public Debt can establish that the bonds haven't been cashed.
Hidden Pensions
If you participated in a pension plan of a company that went out of business or closed its plan and subsequently forgot about your investment, your money is likely under the watchful care of the the Pension Benefit Guaranty Corp., a U.S. government agency that protects the retirement incomes of about 44 million American workers in about 32,500 private defined benefit pension plans. Similar to the Bureau of Public Debt, the PBGC offers a pension search directory on its Web site (www.pbgc.gov), which enables you to determine if you are owed retirement income.
Keeping Track of Assets
The best ways to ensure your assets do not go unclaimed are to do the following:
1. Keep accurate and current records of bank accounts, insurance policies, stock certificates, utility and rent deposits and safe-deposit box locations. 2. Keep accounts active through customer-initiated contact. For example, if you have a bank account, don't expect the bank to always contact you. Be proactive about calling with questions or new information, such as change of address.3. Notify a family member or trusted adviser of the location of your records. 4. Notify all institutions every time you move.
Mellody Hobson, president of Ariel Capital Management, (arielmutualfunds.com) in Chicago, is Good Morning America's personal finance expert. Ariel associates Matthew Yale and Aimee Daley contributedto this report.