Unclaimed Assets: Is the Government Holding Your Money?

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State governments are holding an estimated $41.7 billion in unclaimed property, also called abandoned property. The funds could be from abandoned bank accounts, refunds, security deposits, insurance funds, customer over payments, or uncashed paychecks. The list goes on: stocks, bonds, contents of safe deposit boxes, pensions, tax refunds.

The good news is that the Internet makes to easy to discover if some of that property is yours, and then to reclaim it. (See also: How to Buy All That Stuff the Police Seize)

The Law on Lost Loot

If an account has no activity and the company holding it has no contact with the owner for a year or more, the funds must be turned over to the state, which holds the money and tries to find the rightful owner, according to the National Association of Unclaimed Property Administrators (NAUPA). Claims can usually be made into perpetuity, even by heirs.

Because companies are required by law to send funds from lost accounts to the state of the owners' last known address, you could have unclaimed property in every state where you've lived.

State laws vary. For instance, in some states unused gift cards are deemed abandoned. Some states auction off abandoned property — which could be anything from liquor to sardine cans — and try to return the proceeds to the owners.

In fiscal year 2011, states returned a total of $2.25 billion to rightful owners, according to NAUPA. The average claim was $892. Amounts are often pocket change, but can occasionally run into the millions of dollars. In one such case an anonymous Connecticut resident claimed $32.8 million in proceeds from a stock sale.

Claiming Your Missing Property

How to find if you have unclaimed property?

NAUPA's website has links to state unclaimed property programs. You can also search the database at MissingMoney.com. That site, which is endorsed by NAUPA, lets you search many state databases at once. Both sites are free.

State programs aren't the only ones returning unclaimed property.

Claiming Lost Tax Refunds

Every year the IRS is unable to find people due tax refunds because they move, change their names, or have errors on their returns. For returns filed in 2011 for the 2010 tax year, unclaimed tax refunds to almost 100,000 tax payers amounted to over $150 million.

Taxpayers can use the "Where's My Refund?" tool on IRS' website to locate missing refunds. They can also use the department's phone tool by calling 1-800-829-1954.

To avoid lost returns in the first place, the IRS says taxpayers should file electronic returns and use direct deposit, which are faster and more efficient.

Claiming Lost Pension and Insurance Benefits

The Pension Benefit Guaranty Corp, a federal government agency, has over $300 million in unclaimed pension benefits for 38,000 people. You might be entitled to a benefit if you are a beneficiary of a deceased participant.

To find if you are, use the agency's online search tool.

If you think you have unclaimed life insurance benefits, you should check the insurance company's website for an online database.

Claiming Lost Bonds

For U.S. savings bonds, visit treasuryhunt.gov. Each year, 25,000 payments are returned to the government as undeliverable, the Treasury Department reports. Billions of dollars in savings bonds have stopped earning interest, but haven’t been cashed.

Using Paid Searchers

Some businesses, using states' freedom of information acts, will search for your unclaimed property for a fee. Although most businesses work within the law, watch out for scams. Before signing a contract, contact your state unclaimed property office for more information.

There's no need to pay a fee when you can use free databases or contact your state's unclaimed property office directly.

To avoid letting an account become abandoned in the first place follow these tips:

• Contact the institution holding the account once a year, especially if you move or change your martial status. Most financial institutions don't forward mail for security reasons.
   
• Keep accurate financial records, including bank account numbers, insurance policies, and information on rent and utility deposits.
   
• Cash checks right away.
   
• Respond promptly to requests for confirmation of account balances.
   
• If you have a safe deposit box, record its number, bank name and address, and give the extra key to someone you trust.
   
• Prepare and file a will that details all of your assets.

Have you ever been reunited with your lost or forgotten money or property? Did you discover any using the tools linked above?