Abandoned Property

 

Understanding Abandoned Property:

Recovering and Reporting NYS Unclaimed Assets

Very often, in the 8 years that I worked for HSBC Bank, a customer’s account would go “dormant”. And, occasionally, someone; not fully understanding abandoned property; would refuse to sign the acknowledgement form and the funds would eventually get turned over to the New York State Comptroller’s Office. In the banking industry, if an account becomes inactive or “dormant”, it becomes the responsibility of the bank to attempt to contact the account holder; otherwise it is assumed the account holder has abandoned the property either because of death or negligence.  

“Abandoned Property” in common law, generally becomes the property of whoever should find it and take possession of it first; after attempting to locate the owner, of course. For example, if a tenant abandons an apartment and leaves behind furniture; after a reasonable amount of time, it becomes the property of the landlord. In the same way, it is legal for a town or city to sell an abandoned vehicle at a public auction.

However, there are certain businesses that are required to surrender inactive accounts or un-cashed checks over to the state. These funds are specifically known as “unclaimed”, “abandoned”, or “lost” funds. Abandoned property doesn’t only include bank accounts; it could also be property like wages, insurance benefits or refunds, utility deposits, stocks and dividends, contents of a safe deposit box, or any un-cashed checks. When these funds are turned over, the state serves as a custodian of the money and they are used to serve the taxpayers within the state until they can be claimed. The money doesn’t actually become the property of the state though, and if anyone can prove entitlement to the property, it will be returned at no charge.

Claiming Abandoned Property

The list of abandoned properties is public knowledge and can be found by visiting the New York State Comptroller’s website at www.osc.state.ny.us. The same list also can be found in most libraries and town or county clerk’s offices. When searching the list, you can look for friends, neighbors, relatives, deceased relatives, even some businesses can be found; however, you can only claim your own property or property that you are an heir to. The listing won’t show the exact dollar amount and when you fill out a claim, some additional information may be required; but you will get a check mailed to you fairly quickly if everything is correct.

Because it is public knowledge, “Abandoned Property Locating Services” send out mailings to people who appear on the list and charge a fee to recover the assets. These locating services do nothing more than you can do yourself for free. Sometimes they even make exaggerated claims.

Each state has its own abandoned property office, so if you have moved across state lines, you may want to also contact each office individually.

Don’t Abandon Property

Many times the property that is listed isn’t for someone who is deceased with no heirs or someone who truly abandoned their possessions for their safety, but because of carelessness or disorganization. So, here are some tips to make sure that your money isn’t deemed “abandoned”.

  • Forward your mail when you move. The check could truly be “in the mail”. It could be that last paycheck, or even an unexpected rebate or overpayment on utilities that’s just returned “undeliverable” or even a bank account statement that is forgotten about. Make sure that your name is also on the mailbox-some mailmen will return mail just because they are unaware that a new tenant moved in.
  • Update your phone number. When you change numbers, call to update all of your utility companies, credit card companies, banks, insurance companies, and any other business you have an account with.
  • Cash all checks promptly. Checks are only good for 6 months, unless the check states otherwise, so cashing them quickly reduces the chances that it will get lost and non-negotiable.
  • Keep your accounts active. A bank account will become “dormant” if there is no activity for 3 years, making a small deposit or withdrawal every year will keep you safe.
  • Keep accurate and organized financial records. Be sure that you have a record of all bank accounts, rent deposits, stock certificates, insurance policies, and safe deposit box numbers. Tell a family member or friend where you store your financial records and keys.

Reporting Requirements for Businesses

All New York State businesses have responsibilities concerning abandoned property and the law requires them to annually review their records and transfer dormant accounts to the custody of the state.

Before handing over the funds though, businesses are required to perform their “due diligence” and attempt to reestablish contact through phone calls and mailings. Even still, some businesses have publication requirements. Banks, utility companies, insurance companies, and courts are required to publish the names of the property owners in publically read newspapers within 30 days of their report to the state.

If you believe that your business has unclaimed assets in your custody, there is a “Handbook for Reporters of Unclaimed Funds” available for download on the website www.osc.state.ny.us that provides more information.

Janet Marcel is the owner of Paper Trail of Western New York and is QuickBooks Certified. She has been assisting business owners and non-profits with bookkeeping for over 15 years. Visit her at www.wnypapertrail.com