Make Sure the Government Doesn't Seize Your Unclaimed Assets

Do you know what the term escheatment means? If you are like me, you've probably never heard of that term. I only came across it through a newsletter that I recently received from my bank. Escheatment is when "unclaimed" property or "abandoned" property is handed over to a state government. This can include savings accounts, stocks, bonds, etc. Even the contents of a safety deposit box will be turned over to the government by your bank if the government has deemed it to be abandoned. So when are assets deemed to be abandoned? Well, it depends on your state...but most states consider property to be unclaimed or abandoned after only three to five years of no activity. For instance, if you have no activity in a brokerage account for three years it can potentially be turned over to the state. Same holds true for a savings account...if you don't check the balance or do anything else in the account, it could potentially wind up in the hands of the state government. And it's all legal!

Think it can't happen to you? Think again. The 50 states combined currently hold over 30 billion dollars worth of unclaimed property. That's billion with a "B!" And much of that figure will end up in the states' treasuries. In fact, the states pay auditors to comb through the customer accounts of financial institutions to find these assets to seize. In many cases these auditors get ten to fifteen percent of the amount as a reward. Does this all sound outrageous to you? It sure does to me. Granted, the idea behind escheatment laws was to keep the financial institutions from keeping all these unclaimed funds for themselves thereby protecting the consumers. However, most people will agree that the aggressiveness with which state governments go after this money has just gotten way out of hand.

So what can you do to prevent your state government from seizing your hard earned assets? Here are some guidelines to follow.

For every bank account, brokerage account or any other account that you have - check the balance, make a deposit or withdrawal, make a trade, or do any other type of activity at least once a year. This will show that you have not "abandoned" your property!

If you have an online account at any financial institution, make sure to log in at least once a year. Again, this will keep the state government from acting too aggressively to seize your property.

If you have a safety deposit box, go make a visit at least once a year.

When you receive a check, deposit it right away. Don't give yourself the opportunity to forget about it. By the time you finally remember, it may no longer be yours.

Don't forget to use your gift cards or gift certificates in a timely manner.

Make a list of all the financial accounts you have and the contact number for each of the customer service phone numbers. If you happen to move, call each of the financial institutions and notify them of your address change.

Check your state government's website to do a search for any unclaimed property that might potentially be under your name. If you've lived in any other state, check that state's website too. You would expect that the state would make a reasonable effort to find you if you have any unclaimed assets, but don't count on it. Remember, it's your money, and no one cares more about your money than you!