So many things were happening and so many things forgotten. Several years later you think back, “What ever happened to my grandmother’s diary and marriage ring in that safe deposit box? What about our state tax refund… and the utility deposit, where did they all go?”
The paragraph above may jog some memories among our readers. These situations occur more often in the current economy because of bank mergers, employment and family changes, than most people may realize.
Obviously, taking time to close accounts, safe deposit box rentals, and providing forwarding addresses to institutions and other businesses where you have deposits, prepaid pending orders, etc., is important.
Where Do Your Funds and Valuables Go?
What happens to things you left behind—that utility deposit, or a deceased relative’s forgotten safe deposit box? When and under what circumstances will valuables be sold or taken by an institution or a federal agency?
All states have “unclaimed property” laws and departments. This is to protect the property interests of people that have property in their state.
Unclaimed (sometimes referred to as abandoned) property refers to accounts in financial institutions and companies that have had no activity generated or contact with the owner for one year or a longer period. Common forms of unclaimed property include savings or checking accounts, stocks, uncashed dividends or payroll checks, refunds, traveler’s checks, trust distributions, unredeemed money orders, or gift certificates (in some states), insurance payments or refunds and life insurance policies, annuities, certificates of deposit, customer overpayments, utility security deposits, mineral royalty payments, and contents of safe deposit boxes. Unclaimed Property does not include real estate.
According to the National Association of Unclaimed Property Administrators (NAUP) , “Claims can be made into perpetuity in most cases—even by heirs.”
Businesses should also consider these issues, because state laws require businesses to forward unclaimed property to their respective state’s Unclaimed Property division.
What happens with jewelry or other hard assets in safe deposit boxes? In some states, the unclaimed property administrator may convert property to cash if it is prudent to do so. Other items having only intrinsic or personal value will be stored in a vault or other secure repository until claimed.
According to the NAUP, the combined value of U.S. federal and state unclaimed property is $32.9 billion. In 2006 alone, $1.75 billion was returned to their rightful owners. However, that same year business accounts alone grew by $4.7 billion where contact with the property owners was lost.
There are waiting periods before a bank, utility company, former employer or other institution declares your money or asset “unclaimed property” and transfers it to the state.
Utah’s law, for example, indicates that, “Generally, most property is presumed to be abandoned if no activity has been made for three years. Wages, government checks and utility deposits become unclaimed after only one year.” Utah, and presumably most, if not all states, do not pay interest on the property they hold.
There is a clearinghouse among the states to make all states’ lists of unclaimed property available to the public. The NAUP supports two websites that provide a search capability for any state or province free of charge in the United States or Canada.
What Happens if Your Bank or Credit Union Fails?
According to the FDIC , federally insured institutions will release funds and safe deposit box contents as follows: “When the failed bank’s deposits are assumed by another institution, the branch offices usually reopen the next business day. At that time, you will have access to your safe deposit boxes. In the event of a depositor payoff, the FDIC will send a letter to you informing you of the closing. The letter will instruct you on how you can remove the contents of your box. Access to the safe deposit boxes is typically granted to the safe deposit holders the next business day after the closure.”
Both FDIC and National Credit Union Administration (NCUA) insured institutions have a “claiming period.” Share or deposit accounts claimed within the 18-month insurance period are paid at their full-insured amount.
Since most failed institutions’ assets and deposits are taken over by other institutions, the accounts move to the new institution. In cases where there are unclaimed cash accounts, it would appear that they would most likely be transferred to the respective state department for unclaimed property after the 18-month period, hopefully without a write-down in value. This would be similar to the FDIC policy in the next paragraph.
The FDIC explains, “Some people never claim their insured deposit from the FDIC and, under federal law, forfeit the money.” Do you really forfeit your money?
A list of names of credit union unclaimed accounts is available on the NCUA’s AMAC website
Locating Missing Safe Deposit Boxes and Accounts
The FDIC recommends that account owners or their heirs finding evidence of old deposit accounts or safe deposit boxes, (1) check to determine if the institution still exists at the FDIC Institution Directory, then (2) realize that the institution may have changed names, merged with another institution, was purchased or transferred after a FDIC takeover. Bank histories are available in this directory also. Check with your state government for state chartered institutions having no federal insurance.
Old “account evidence” may not be accurate. The account or box may have been closed without updating passbooks or other records, withdrawn to a minimum balance in the case of funds, or transferred to the applicable state’s unclaimed property division if the owner failed to update contact information for an extended period of time.
If you are moving, especially if you have brokered deposits or beneficial accounts, an ounce of prevention could save you or a loved one much stress and possibly money. If a relative is facing incapacitation or death, the family should make inquiries to their banks, institutions and other businesses as soon as possible.
What are the odds of finding your name on the list? I checked my name at the NAUP site and found two relatives that have unclaimed funds!
