There’s money for you “out there,” just waiting for you to come and claim it. So why aren’t you? Probably, if you’re like most Americans, because you don’t know where to find it or that it even exists. It’s true – there are piles of money owed to ordinary citizens every year but go unclaimed. You’ll be amazed when you hear how much it is – and that your name might be on some of it!
How much money is left unclaimed?
According to the National Association of Unclaimed Property Administrators (NAUPA) there are $32.9 billion in assets sitting unclaimed in state treasuries and other agencies right now. That number is just a slice of the total pie, as the state of New York holds $13 billion in unclaimed funds by itself, and California and Texas add another $14 billion to the pot. Local governments recently collected $23 billion in unclaimed money but only $1 billion was ever claimed. The U.S. federal government is sitting on $17 billion in savings bonds alone, and literally hundreds of billions of dollars in “forgotten” money held by the IRS, social security, and other agencies.
Why does money go unclaimed?
What possible reason could there be for someone not collecting money that is due to them? The biggest reason funds aren’t reunited with their rightful owner is because the person doesn’t know about it. In fact, a simple change of address can disconnect the paper trail from so many local, state, and federal agencies.
So when people move, refund or dividend checks often get returned to sender. When that happens, the IRS or federal government isn’t going to expend more man-hours tracking down the recipient. So instead, the money is added to the coiffures (a nice way to collect interest on a big chunk of money or even “reallocate” lost funds after a certain amount of time.)
Other than a simple failure to change address, a huge amount of money goes unclaimed because the recipient doesn’t know about it. For instance, it’s estimated that 25% of life insurance policies never get claimed because no one notifies the underwriter when the policyholder dies, and the same can be said for some retirement and pension accounts.
There are also laws in place that when a bank, investment account, or financial institution has money left “dormant” for a certain amount of time but can’t contact the account holder, the assets are turned over to the state for safekeeping.
Who might owe you money?
1. The IRS
Every year, thousands of income tax refund checks are returned to the IRS because taxpayers changed their address, changed their name, or filled out the forms incorrectly. In fact, the IRS has nearly $200 million left unclaimed every year and the average undeliverable refund check is $1,148.
2. State tax refunds
Likewise, state tax collectors are sitting on huge amounts of refunds that go unclaimed or unfound.
3. Earned Income Tax Credit (EITC)
For those who didn’t file a tax return because their wages were below the filing requirement, they might still be eligible for refund checks within three years of filing – but not know about it.
4. FHA insurance refunds
If you had a FHA-insure mortgage, you might be eligible for a refund from the U.S. Department of Housing and Urban Development. HUD is also holding hundreds of millions of dollars in unclaimed assets from homeowners whose homes went into foreclosure or were sold.
5. Mortgages
Mortgage banks always have piles of unclaimed checks due to former customers, whether settlements from buying or selling a home or refunds when a person refinanced. This is particularly prevalent because people are often on the move when a mortgage transaction has ensued.
6. Credit Unions
Your local credit union may be holding funds earmarked for you, above and beyond normal bank business.
7. Child support payments
Every year, about $750 million in child support payments goes unclaimed! States collect billions of dollars annually in court-ordered child support payments, but a large part of it is never gets to the rightful recipient because of incorrect address information or other errors.
8. Veterans benefits
For those brave men and women who served our country in the military, there are myriad benefits on the books – but often hard to claim because of a quagmire of red tape. Disability payments, death benefits, burial allowances, back pay, and life insurance for veterans too often go unclaimed.
9. Bank accounts
Did you know that every year, more than 400 FDIC insured banks close their doors? In the wake of the mortgage meltdown, banks closed and were absorbed into banks frequently, including the largest ever, Washington Mutual. Every time that happens, there are customer IRAs, CD s and savings left unclaimed in the confusion.
10. Safe deposit boxes
Safe deposit boxes are frequently abandoned by their owners, who often simply forget about them, or the heirs don’t know about them when someone passes. If the safe deposit box rent isn’t paid, the contents are auctioned off by the custodians – and the money sits idle until claimed.
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In part two of this blog, we’ll cover ten more places that might be holding your unclaimed money, as well as how you can actually search and recover it!
