How to Avoid Having Unclaimed Property

There are billions of dollars of unclaimed property. We've written about a number of ways you can find out if a state or the federal government is holding property for you. See http://blogger.uncleleosden.com/2007/05/unclaimed-money.html. Better than having unclaimed money, though, is making sure you get everything that's yours in the first instance. Here are some ways you can avoid having unclaimed money.

Cash or deposit all checks. This may be one of the most typical sources of unclaimed money. Small checks for dividends, rebates, credit card cashback awards, refunds and the like almost seem like an annoyance, and the rise of Internet banking doesn't make it easier to deal with them. But make sure you cash or deposit all of them. A brief look at the numbers will tell you that these little checks add up. Let's assume you get $50 a year, after taxes, of annoying little checks over the course of a 50-year adulthood (mid-20s to mid-70s). We'll also assume that you're thrifty and save this money, earning 6% a year return on it. At the end of the 50 years, you'll have about $14,500. Adjusted for inflation of 3% a year, you'll have about $3,165. That's enough for a nice Carribean or Alaskan cruise. You could play a lot of shuffleboard and pig out at buffets if you just deposit all your checks. If you're not careful about these little checks, it's easy to let $50 a year slip out of your hands. Just remember that, with a little more diligence, you could taken a cruise.

Claim all rebates, refunds and rewards. One reason manufacturers like to offer product rebates, instead of just lowering prices, is that many people don't claim them. They just can't be bothered with the paperwork, which is usually enough to be annoying. Then, the manufacturer gets the best of both worlds. The consumer is lured in by a rebate, believing that he or she is getting a deal. But the manufacturer makes a sale without having to actually lower the price. Claim all rebates, refunds, and cashback and other rewards. A nice cruise is at stake. If you don't, many of these claims may not show up on government lists as unclaimed property--because it's not yours unless you try to get it in the first instance.

Keep track of your assets and organize your financial records. This may seem obvious, but it gets harder as you progress through your career, prosper and begin to accumulate all kinds of assets that seemed like a good idea at the time you invested in them. But as stocks split, mutually owned insurance companies and savings and loans become stock corporations, banks change their names, married couples holding property jointly get divorced, and so on, keeping track of all assets becomes harder and harder. People are busy and paperwork is a hassle. Data in hard drives is lost as computers are replaced and downloadings are incomplete. But not keeping track of assets means you're losing them. Take the time and trouble to keep track of what is yours. Maintain your records, for a long time. If one of your assets somehow becomes unclaimed property, you may need an ancient account statement or stock certificate to prove that you are the true owner who was last heard from 15 or 20 years ago. If you lose an average of $50 a year over the course of your adulthood because of sloppiness and laziness, another Alaskan or Carribean cruise goes down the drain.

Update your address. Another common way people lose money and other property is to fail to update their banks, brokerage firms, mutual funds, 401(k) administrators, insurance companies and other financial firms with changes of their address. This should be a nobrainer, but some people . . . .

Respond to legitimate inquiries about your accounts. Sometimes, you might get an inquiry from a bank or other firm to verify that an account is yours. Make sure the inquiry is legitimate (never give out information over the phone or in response to an unsolicited e-mail). But respond to all legitimate inquiries. Otherwise the bank or other firm might turn your account over to a state agency as unclaimed property.

Leave jobs on an informed and fully compensated basis. Whenever you leave a job, make sure you find out the status and balance of any retirement accounts you have. Very important are 401(k) and employee stock option plan accounts--get account numbers and balances, and find out what options you have to keep them with the employer, transfer them and/or cash them out. If you're lucky, you might also have a traditional pension plan account. Find out if you're vested, when you might start collecting benefits, and what options you have. Collect all of the commissions, bonuses, awards and compensation you've earned. Cash out your accumulated vacation time and sick leave, if possible. Exercise your stock options if possible. Check into the situation with deferred compensation and restricted stock. For more information about things to think about when leaving a job, see http://blogger.uncleleosden.com/2007/05/financial-checklist-for-job-loss.html.

File tax returns--and deposit the refund check. Taxes are inevitable, but tax refunds aren't. You have to file a return in order to claim your refund. Amazingly, some people don't file returns even though they're entitled to refunds. Don't pay more than your fair share of taxes. File for your refund. Even more amazingly, some people don't deposit their refund checks. This violates the first rule of avoiding having your property be unclaimed. Deposit your tax refund checks. Better yet, have the refund electronically deposited into your bank account.

Unclaimed Money

There are billions of dollars worth of unclaimed assets in America. It's important to marshal your assets, particularly as you approach retirement. If you've been careful about your finances, chances are that you have everything that you're entitled to. But there are places you can check to make sure you haven't left any money on the table. Remember that you may have money coming to you directly, or perhaps from a deceased family member through inheritance. That means you should check under your name and the deceased person's name. And if your spouse is busy unloading the dishwasher, you may want to check for him or her as well.

Old bank accounts, shares of stock, insurance policies, annuities, uncashed checks, unredeemed money orders or gift certificates, security deposits, contents of safe deposit boxes, customer overpayments, and other financial assets must be turned over to the state of the customer's last known address, if the customer has not made any contact or engaged in any activity for a period of time (such as a year or more). You can search at www.missingmoney.com. Also, you can go to www.unclaimed.org to get more search options (this site can link you to each state's treasurer, which allows you to search individual states).

You can check for an unclaimed federal income tax refund at www.irs.gov. Use the "Where's My Refund" feature on the front page. State tax agencies usually provide a way to check online for the status of a refund.

If you worked 10 years or more for an employer with a pension plan, you may have earned the right to a pension, even if you no longer work there. You can check with the employer. If it has gone out of business, its pension may have been taken over by the Pension Benefit Guaranty Corp. This is a federal agency that guarantees pension benefits up to a limit (around $49,500 for pensions with a single beneficiary). You can check at https://search.pbgc.gov/mp/ to see if you might have a pension claim. Even if your name doesn't appear in this search, you may want to find out if the pension plan is now being administered by the Pension Benefit Guaranty Corp. Search at www.pbgc.gov/workers-retirees/find-your-pension-plan/content/page676.html. There's always a chance your name is spelled differently in the government's records, so you should find out who's taken over the plan and then figure out how to establish any claim you may have.

What if an old employer had a 401(k) plan, and you want to check to see if you have an account? Contact your old employer. If your old employer has gone out of business, you can search a Department of Labor website for information: www.askebsa.dol.gov/AbandonedPlanSearch.

Of course, keep track of your Social Security benefits. You should get an annual statement from the Social Security Administration. If you need to request a copy, go to www.ssa.gov/mystatement. Remember that not only do you get benefits, but your spouse and perhaps even your dependent children may get benefits. This is something we discussed earlier at blogger.uncleleosden.com/2007/05/mysteries-of-social-security-retirement_03.html. Make sure eveyrone in your household gets the benefits to which they're entitled.

For more detail about unclaimed money and property, please visit Uncle Leo's Den at
www.uncleleosden.com/Step16Foundation.html#marshal. For more information about Social Security, read our May 1, 2007 blog blogger.uncleleosden.com/2007/05/mysteries-of-social-security-retirement.html, and May 2, 2007 blog, blogger.uncleleosden.com/2007/05/mysteries-of-social-security-retirement_02.html.

To avoid having your money or property go unclaimed, see http://blogger.uncleleosden.com/2008/08/how-to-avoid-having-unclaimed-property.html.

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