“Charity is no part of the legislative duty of the government.”
— James Madison
Chances are, if you are owed money a state government has its hands on it. Each state has its own timeline, and it depends on what type of property we are talking about, but most state have between a 1-5 year window for a company to return its property to you. They call this a dormancy period. If the company is unsuccessful after that time period they are legally obligated to turn the money over to the state.
Why do the states do this?
The answer to this question varies, depending on how cynical you are. The naïve answer is that the benevolent states are acting as a consumer protection agency. The skeptic’s answer is that the states make money off of your money. Let’s explain:
Banks, insurance companies, employers, utility companies, and the like are legally required to turn unclaimed funds over after a dormancy period. In 2009 Florida collected a whopping $298 million in unclaimed money. 64,000 people claimed their money, which totaled $41 million. Good for those people right? Good for them, but better for Florida. After the claims were paid out they still made out with $254 million dollars, $111 million of which was transferred to the state education fund.
How long has this been happening?
The United States unclaimed money law has its roots in the British law of bona vacantia, which means “vacant goods”. Under this dictate goods with no apparent owner became the property of the king. Since the U.S. doesn’t have a king they had to create a state government agency to handle this issue.
The Unclaimed Property Act allows for a central agency in each state where people can search for their unclaimed funds. Every state has a version of this act. This act is sometimes called the W.C. Field’s Law, because when the entertainer died in 1946 his heirs spent years trying to contact hundreds of banks across the United States to locate his assets. The Eastern States have had unclaimed property laws since the 18th century. Wyoming, last in the alphabet, was the last to enact their law. It waited until 1994.
The unclaimed property laws required states to create a program to handle these funds. The function of the program is to:
- Act as a consumer protection agency for those individuals and businesses with lost assets
- Indemnify businesses and allow them the opportunity to avoid the liability and expense of maintaining these assets on their books
- Receive, evaluate, and pay claimed accurately and efficiently
- Promote awareness of the program
How long do I have to get my money?
The good news is that most states will hold your money indefinitely. The exceptions are Iowa (10 years) and Indiana (25 years) which turn the property over to their states should no claim occur. While this is the current status, legislation is always changing and governments are not necessarily inclined to charity. We highly recommend that you search immediately for your money, and do not hesitate to file claims for funds that are owed to you or your loved ones. It is not in the states’ self interest to initiate a search for your, or to make it simple for your to reunited with your property, so the onus is on you.
Show me the MONEY!
The first step in collecting unclaimed money is to devise a search strategy. When you search for unclaimed money you should not only search for yourself, but also for members of your family. Make a family tree, and go back a generation or two. You can and should search for family members, both living and deceased. When making this family tree include a list of states where they resided and organizations they worked for.
Once the tree is completed it is time to start looking. Most states have their own database. Check your state’s page for tips on how to search.