OUR SERVICES
PAYROLL RESOURCES
OTHER RESOURCES
CONSIDERATIONS
PUBLICITY
CREDENTIALS
How many times have you moved over your lifetime and had to go through the process of changing over your correspondence to your new address. If you’re well organized, then you’re fairly confident that you notified everyone. But if you’re not very well organized, could you have forgotten to contact a financial institution? Well then, consider this. Simply filling out the change of address form from the post office is no guarantee of getting all your mail. You are putting the responsibility in someone else’s hands and forwarding services expires after one year. Also, due to privacy laws, some financial documents cannot be forwarded and are automatically returned to the sender.
A change of address form isn’t the only obstacle to keeping track of your money. Failing to cash a dividend check, make a deposit or withdrawal from a bank account at least once a year, or failure to respond to correspondence from a mutual fund company, can lead a financial institution to believe that an account is unclaimed property. State laws are very specific. I should know. Many years ago, I audited this area in JPMorganChase to ensure that they were following all the New York State rules for adherence to Abandoned Property. A financial institution is only required to attempt contact with the account owner two times and if unsuccessful, the property is turned over to the state for safekeeping after a certain period of time, depending on the type of asset. Oftentimes, financial institutions will place an advertisement in a newspaper with a listing of thousands of names in the hope that the owner will see it.
As of 2004, New York State holds approximately 25% of all abandoned property in state control, representing over $6 billion. The types of assets include bank accounts, misplaced bonds or securities, uncashed dividend checks, uncollected utility deposits, and unclaimed life insurance benefits. It is also expected that this number will increase somewhat dramatically over the next few years. Why? In the last few years, most of the major insurance companies demutualized, which means they converted over from privately owned companies to publicly traded corporations. As part of this process, the insurers issued stock or cash to all policyholders, based upon the size of their policy and how long they owned it. When MetLife demutualized in 2000, it announced that it could not locate the owners of nearly 60 million shares, worth at the time over $2 billion. That money hasn’t yet made it into the state treasuries and will start flowing starting next year.If history is any indication, only about one third of the original owner’s will ever be found and lay claim to the funds. State governments, looking at this potential revenue source to plug their budget shortfalls, have been shortening with the dormancy periods, the time that the funds must be held by the state but cannot be used. There are no simple answer in looking for money, since oftentimes, it depends on the type of asset that might be missing. There is no centralized clearinghouse that accumulates this type of information.
REDLIG FINANCIAL SERVICES · © 2007 - ALL RIGHTS RESERVED