What is Escheat? OR Don’t Lose My Money!
Money. We work so hard for it. We save it. We count it. We invest it. So how is it that there are billions (yes with a B) of dollars of “unclaimed money” in the United States? Could you actually misplace or forget about some of your money? Could your heirs easily find all of your accounts?
Today I learned first-hand just how easily this can happen. We moved so I went to the bank to change the address on our accounts. Click, click, click. The teller smiled and said, “The address has been changed on all your accounts.” It was done.
Or was it? Our number of accounts didn’t match. The teller was missing one account I knew I had. I went home to grab a statement and called. There it was. My account. The friendly voice explained, “Oh, the tellers do not have access to this screen with these types of statements/accounts.” Wait, What?
Would I have continued to push if I had been an heir, or would I have assumed the account number changed or was closed? An heir might not know for certain. Had I died and my heirs knew to go to that bank, but didn’t know the account number or have the right phone number …all that money could have been lost. We would have relied on the bank to alert my estate. Hahahahaha! We moved and our address changed. Mail is only forwarded for a few months. By the time the bank knew I had died, the mail would likely be returned if they did send something to our original address.
Turns out this happens all the time. With bank accounts, insurance policies, certificates of deposit, safe deposit boxes, pensions, retirement funds…all sorts of financial transactions. We know mail is only forwarded for a few months…and you might not have left financial account passwords for someone to easily find. OH WOW!
So how much money is lost? In 2016 it was TENS OF BILLIONS of dollars. Simply gone. According to some sources, 1 in 3 Americans were effected. Sometimes it is forgetfulness. Sometimes it is confusion. Sometimes we are just busy and drop a ball. Technically, after a period of inactivity, the financial institution is required to send “unclaimed” money to the state. This is called ESCHEAT.
Escheat laws were originally intended to create a “lost and found” for each state. If there is no activity on an account for 3-7 years, the process can begin. Owners don’t always get their money back. So, the burden is yours to keep track of your money. All of it!
What’s the takeaway here?
Find a safe place where you can store copies of all your statements with account names and numbers. It can be on your computer, in a fireproof cabinet, or an online vault. Be sure to list life insurance information, also. Make sure it is a safe place that your heirs, attorney or financial planner can access. Of course, I keep my info in our book, Read This…® When I’m Dead.
But now I’m even more inspired to keep everything organized and up-to-date!