Each year banks give states $4.7 billion belonging to people who failed to “initiate a transaction or communicate with the financial institution” in the past three years. The money isn’t lost forever, but getting it back can be a bureaucratic hassle full of forms and headaches.
The average works out to $282 per person. It won’t pay for retirement, but it’s nothing to sneeze at either.
Laws on abandoned property were enacted to protect consumers — to keep banks from eating up dormant accounts through annual account fees. Theoretically, the states are simply holding the assets in safekeeping until the owners turn up to claim them.
But over the course of the last few decades, the system has become a source of cash for states, which generally do not pay interest on the abandoned funds and can use the money to fill budget holes until it is claimed. Only a fraction of these assets are ever claimed.
Anyone who sets aside money for long-term goals, such as college expenses or the final years of retirement, is especially vulnerable.
Keep the state’s budget-filling hands off your money by annually making small transactions between each of your bank accounts. If you have a safe deposit box, swing by at least once a year for an in-person visit to admire grandma’s old jewels. You can add it to your list of solstice activities right next to “change smoke detector batteries.”
If your money is already gone, search the National Association of Unclaimed Property Administrators’ database of abandoned accounts at MissingMoney.com.