States Scooping Up Assets From Millions of Americans

[question everything]

The Wall Street Journal

States Scooping Up Assets From Millions of Americans
'Unclaimed Property' Fattens Public Coffers
By SCOTT THURM and PUI-WING TAM
February 4, 2008; Page A1

State governments, aided by corporate middlemen, are collecting billions of dollars a year from Americans by enforcing obscure laws to seize money from forgotten bank accounts and other so-called unclaimed property. All states have unclaimed-property laws. The idea behind them is to return dormant assets -- bank deposits, stock, uncashed payroll checks, valuables in safe-deposit boxes -- to their owners. The laws require banks and brokerages to hand over the assets to states. Most states then make some effort to locate owners and return the property.

But states from Massachusetts to California have turned their programs into big money-makers, and routinely dip into unclaimed assets to cover state expenses. States have broadened laws to cover unredeemed gift cards and uncashed corporate checks to employees and suppliers. They've required businesses to turn over assets more quickly, and curtailed efforts to locate owners. And they've strengthened enforcement by hiring private auditors to examine corporate books in search of "lost" property. The auditors' reward: 10% to 15% of proceeds. California is currently holding more than $5 billion in unclaimed property, nominally owned by more than eight million individuals and companies. Among the names appearing on the state's list of owners of seized assets: Google Inc. co-founder Sergey Brin, actress Angelina Jolie and baseball Hall of Famer Willie Mays.

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The 50 states collectively held roughly $35 billion in unclaimed property as of June 2006, according to the most recent data from the National Association of Unclaimed Property Administrators and from the state of Delaware. States collected about $5.1 billion in unclaimed property in 2006, up from $3.6 billion in 2003, the data indicate. On average, states identify owners and return about one-third of this property. States regard property as "unclaimed" if the owner hasn't had contact with the custodian of an asset for a specified period of time. In the case of bank deposits, depending on the state, that means three to five years without deposits, withdrawals or any other customer contact. For stock, it's three to seven years without cashing dividend checks, voting proxies or otherwise contacting the issuer or brokerage.


Delaware, the legal home to many big companies, is an aggressive collector of such assets. State officials examine corporate accounts, looking for uncashed checks and credit balances. Unclaimed property has become Delaware's third-largest source of revenue, generating $365 million in the fiscal year ended June 30, 2007. That amounts to about 11% of state revenue, more than corporate-income tax or the state lottery. Delaware is one of the states that don't make much effort to seek owners of unclaimed property. It's up to the owners to figure out if states have their assets and to file claims. If owners don't come forward, many states keep the cash and sell physical property, such as jewelry from safe-deposit boxes, on eBay. Delaware's director of revenue, Patrick Carter, says the state returns less than 5% of the unclaimed property it collects, in part because it's difficult to link corporate credit balances with individual owners.

California officials stopped notifying owners whose property had been seized or listing their names in newspapers. Last June, a judge temporarily halted the program, ruling that the state wasn't following its rules for seizing and returning the property. The ruling came in the case of Chris Lusby Taylor, a former Intel Corp. employee whose 52,224 shares of company stock had been handed to the state after he failed to cash dividend checks or vote proxies for three years. The state sold the shares. When Mr. Taylor discovered the transfer and filed a claim, the state offered him $200,000. A federal appeals court said Mr. Taylor was entitled to the current value of the shares, then roughly $3.8 million. After the ruling, California lawmakers instituted changes intended to limit seizures and return more property to owners; the program is back in operation... Not every state views unclaimed property as a revenue generator. West Virginia says it gave back more assets than it collected in 2005. Missouri, Iowa and Kansas set up booths at county fairs to advertise their programs and identify owners. Oregon and Colorado hold unclaimed property in funds with the principal untouched, using only the interest.


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URL for this article:
http://online.wsj.com/article/SB120209114858539787.html (subscription)

[Fridays Child]

1. Here's a site that links to searchable databases of unclaimed assets, by state...

http://www.unclaimed.org/

[question everything]

2. Thanks. It is like the Social Security Fund

Only IOUs while the government spends it.

[Dawggie]

3. This coutry's honor has been replaced by greed. n/t

[question everything]

4. Greed and incompetence and shrug of responsibility (nt)