What You Should Know About Escheating
Beneficiaries should benefit from the funds of
life insurance policies: state treasury departments
shouldn’t. Depending on the individual state’s escheat
laws, heirs of the deceased can spend years retrieving
monies from the state unclaimed funds department while
the state uses those funds to cover expenditures.
With the help of Unclaimed Assets, beneficiaries can
collect funds due them now. In cases where the
beneficiary is also deceased, we contact the estate
and the next-of-kin, in accordance with company
distribution policy, and assist in the correct
distribution of the benefit.
State Fund-Owner Reunification
Efforts
-
By statute, the majority of states
are required to perform a one-time advertisement
of the name/address of the owner in the county paper
of the owners last known address.
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Utilizing the media to announce or
list owners as a public
service announcement;
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Renting a booth at the State Fair
and using this resource to both educate and reunite
the public with unclaimed funds;
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Speaking at various public
events/clubs/meetings;
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Working cooperatively with other
states to collect and transfer property
reciprocally;
-
Utilizing resources from other
governmental agencies to help locate an owner
(Drivers license, social security administration,
etc.)
-
The Internet
Since 1989, our staff has been surveying the various state
unclaimed property departments. Very few states are
willing to discuss the amount of money that is
escheated and how much is distributed each year. In
our surveys, no state was
willing to release information about use of
undistributed funds.
State Unclaimed Property Departments – 2003 Fiscal
Year
|
Alabama |
$34,500,000 in |
$11,900,000 out |
=34% |
|
Alaska |
$4,500,000 in |
$1,500,000 out |
=33% |
|
Colorado |
$40,000,000 in |
$10,000,000 out |
=25% |
|
Hawaii |
$14,900,000 in |
$2,700,000 out |
=18% |
|
Maine |
$21,800,000 in |
$7,900,000 out |
=36% |
-
Nearly all states were surveyed. Many will not
release information because of poor distribution
record.
-
Statistics are for last year of information the
states will release.
-
Is escheating a good idea?
Excerpts
from Articles about State’s Efforts to Distribute
Unclaimed Funds
States are required to hold these
funds until the owners can be found. Meanwhile the
state treasuries, which hold an estimated $22 billion
in unclaimed assets, have come to increasingly rely on
these forgotten funds. Since
the states typically return about 20% to 25% of the
assets, they usually keep that much in the reserve in
case someone comes forward to claim the money. The
rest of the funds are often placed in the state’s
General Fund and used for state programs.
~Excerpt from “Claim Your Assets – or the States
Will” Wall Street Journal. Nov. 2003
Although states receive these death
benefits, they don't necessarily keep them in a
reserve fund. In Texas, for example, the money is
transferred into a general fund used to pay for
state services. State lawmakers then allocate
money to the Unclaimed Property Division to pay claims
in case the beneficiaries step forward. The amount
allocated is based on "past experience" in paying
claims, not the actual value of the claims, says
Sheila Clancy, a spokesperson for the Texas
comptroller. That's because not all property is
claimed.
Peter DeVries, an administrator for unclaimed property
in Florida's Banking and Finance Department, says his
department keeps only about 5% to 8% of what comes in.
If that money runs out, he borrows money from the
Education Department.
~ Excerpt from
How to Find Lost Life Insurance Policies,
Insure.com