What happens if your landlord tries to return your $500 security deposit but they don’t have your forwarding address? Or the company whose stock you bought in college is trying to send you dividend checks in the mail, but they never get cashed? In both cases, your money becomes “unclaimed property”.
In total, Americans have $42 billion in unclaimed property, creating the world’s largest financial lost-and-found. On average, 1 in 10 Americans have unclaimed property in the form of uncashed checks, forgotten deposit boxes, and more just lying around waiting for their owners to come claim them.
Could you have unclaimed cash? How can you check? Let’s investigate.
What is “unclaimed property”?
Unclaimed property is a financial asset that has an owner, but the owner hasn’t come to get it.
The most common examples of unclaimed property are checks that haven’t been cashed. These could be returns of security deposits for rent or utilities, final pay stubs, refunds, class action settlements, stock dividends, royalty payments, and more (all the more reason you should give your direct deposit information whenever possible).
Other examples that probably aren’t as applicable to the under-30 crowd include long-dormant savings and checking accounts, life insurance payouts, and tangibles such as forgotten security deposit boxes.
How and why does property go unclaimed in the United States?
Property goes unclaimed all the time in the United States, mostly because financial entities are unable to contact owners.
Let’s say your old leasing company tries to return your $500 security deposit. However, without your direct deposit information or your forwarding address, they’re kind of stuck. They might try to reach out to you via email or your cell, but most states only require the holder of the property to reach out to the owner via snail mail once.
If you don’t claim your $500 after the, erm, letter, the $500 enters a “dormancy period” of typically one year before the financial institution holding the money must officially declare it as unclaimed property to the state.
So basically, if you don’t cash your $500 check within a year of moving out, your leasing company will turn it over to the “lost and found” aka the state government.
What are the laws surrounding unclaimed funds?
Laws surrounding unclaimed property are extremely strict. Financial institutions are not allowed to keep the unclaimed property under any circumstances; they must report it to the state immediately after the dormancy period.
If they don’t, and try to pocket the goods, they’ll get into immense trouble with the IRS. Furthermore, there’s no statute of limitations on unclaimed property so the feds can come knocking anytime, and audit companies back for decades to make things right.
The lengths our government goes to in order to protect unclaimed property for individual Americans is pretty awesome, if you ask me. Without those property protection laws in place, many companies would probably begin leveraging every manipulation tactic in the book to cheat consumers like us out of our rightful property. For example, a lot of checks from financial institutions to individuals might start mysteriously disappearing from the mail…
After all, how would you feel if your landlord simply waited for you to forget about your deposit and spent your $500 on some tacky lobby statue?
Do unclaimed property laws change based on location?
Yes; each state has their own unclaimed property laws. Variables like dormancy periods, due diligence, and more might vary across borders.
For example, Alabama’s dormancy periods average three years, but for some reason, financial entities don’t have to report traveler’s checks as unclaimed until they’ve gone un-cashed for 15 years.
In New York, holders of the property must perform the following due diligence at least 90 days prior to reporting the property as unclaimed: contact the owners via snail mail at least once, twice if the value of the property exceeds $1,000.
Most states have similar laws calling for such comically little “due diligence.” But in all seriousness, I totally get it; companies don’t hire teams of private investigators to find Steve, who never cashed his $6.47 dividend check back in 2009. Rather, it’s our responsibility as consumers and patrons to keep our contact information up to date and make it easy for these institutions to pay us.
Who’s tracking unclaimed property?
Once the financial entity holding the unclaimed property reports it to the state, the state tracks it on a government-run database, accessible through a web portal.
While each state runs and maintains their own unclaimed property database, you don’t have to search every state you’ve lived in individually. Thankfully, there are trustworthy third-party sites that can show you a bird’s eye view of all the states where you have unclaimed property.
Missing Money cuts to the chase, letting you find out if you have unclaimed property, and in which states, in less than a second. All you have to do is plug in your name and voila, a list with links to claim in each state appears (more on that in the next section).
Unclaimed.org, the official site of the National Association of Unclaimed Property Administrators, is a better destination for simply learning more about unclaimed property in general. It features a search function, but it’s less usable and accessible than Missing Money. Still, there’s tons to learn on Unclaimed.org if you’re curious to know more about this strange phenomenon.
How can I find out if I have unclaimed funds?
You can find out if you have unclaimed property in seconds by plugging your full, legal name into Missing Money’s search bar.
To my shock, I was one of the lucky Americans with unclaimed property. Woohoo!
One quick look at the “Reported By” column and I knew exactly what had happened. I own some shares of Disney stock and they’ve apparently been sending my dividend checks to an old address in Wisconsin. It’s been going on for so long that my unclaimed cash has accumulated into a nice pile that will cover my fall latte budget.
How can I claim my unclaimed funds?
If you also have unclaimed funds, all you have to do is click CLAIM next to your name (Missing Money will list everyone else with your name, so be sure to click the one that matches your current/past address to confirm it’s you).
Using the CLAIM button I was redirected to the WI state government website where I followed some pretty logical steps to complete my claim. To nobody’s surprise, the first thing they asked for was my direct deposit information.
Next, Wisconsin (and I assume most other states) requires you to provide three documents to prove your identity: a government-issued ID, proof that you lived at the address associated with the claim, and proof of your social security number.
My ID and work documents covered #1 #3, but #2 was a bit more of a challenge. I dug through my inbox and thankfully found a scan of my old lease for the building, so I submitted that.
Once I’d submitted everything and provided my digital signature confirming I wasn’t a bad guy, I finally reached the confirmation page. I wasn’t too surprised to see that it would take six to eight weeks for an update, and I expect it will take even longer due to COVID-19.
Even still, I’m grateful that I not only had unclaimed property, but that Disney reported it, the state government of Wisconsin tracked it, and the claim submission process was rigorous but user-friendly.
If you haven’t already, I very strongly encourage you to spend a minute on Missing Money, searching for unclaimed property belonging to you or your loved ones.
While technically there’s no big rush to claim your unclaimed property, it’s not doing anyone any good just sitting in a state escrow. You might as well file a claim and grab it now so you can begin multiplying it!
What should I do with my money once I receive it?
With a Chime Automatic Savings Account, you’ll enjoy an above-average interest rate of 2.00% APY7 right off the bat. Plus, you’ll have the option to round up every purchase to the nearest dollar, depositing the change into savings and filling your monthly statements with clean, whole numbers. ^
Open a CIT Savings Builder Account and you’ll score 1.00% APY compounded daily. In order to keep that sweet compounding interest, CIT requires you to maintain a balance of $25,000 or deposit at least $100 monthly, which I see as a perk; it ensures that you don’t neglect your savings account, lest you totally forget about it and find it on Missing Money in 10 years!
* Chime is a financial technology company, not a bank. Banking services provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC.
^ Round Ups automatically round up debit card purchases to the nearest dollar and transfer the round up from your Chime Checking Account to your savings account.
2 There’s no fee for the Chime Savings Account. Cash withdrawal and Third-party fees may apply to Chime Checking Accounts. You must have a Chime Checking Account to open a Chime Savings Account.
7 The Annual Percentage Yield ("APY") for the Chime Savings Account is variable and may change at any time. The disclosed APY is effective as of November 17, 2022. No minimum balance required. Must have $0.01 in savings to earn interest.
I’ll admit that when I was first assigned to investigate “unclaimed money and how to get it”, I thought it sounded super sketchy. But nothing could be further from the truth.
Reclaiming your unclaimed money from the government is a smooth process, and one that you should repeat at least once a year. After all, it only takes a few seconds to check. Plus, searching for any unclaimed property could be a great way to share something new with your folks and even fund Christmas this year.