How money ends up with the state

Abandoned-funds laws exist to protect owners. Without them, a business could quietly keep money it owed to someone it lost touch with. Instead, the law requires the business to hand the money to the state, which keeps it safe and makes it searchable until the owner comes forward.

Here is how that happens, step by step.

1. The account goes quiet

   The owner moves, changes jobs, forgets an account, or passes away. Mail is returned, checks go uncashed, and there’s no activity on the account.

2. The dormancy period runs

   State law sets how long property can sit without owner contact before it is presumed abandoned. For many types it’s three to five years. For wages and utility deposits it can be as short as one year.

3. The holder tries to reach the owner

   Before reporting, the holder sends a due diligence notice to the owner’s last known address. If the owner responds, the account stays with the holder.

4. The holder reports and delivers it

   If the owner doesn’t respond, the holder includes the property in its annual report and sends it to the state of the owner’s last known address.

5. The state takes custody

   The state records the owner’s name and property in its database and publishes notices so owners can find it. Cash is held, and securities may be held or sold after a period set by law.

6. It waits for the owner

   The state safeguards the property, often for years. In most states, there is no deadline for the owner or heirs to claim it.

7. Someone files a claim

   The owner, an heir, or a registered recovery firm acting for them files a claim with proof of identity and ownership.

8. The property is returned

   Once the state approves the claim, the money is paid out, or the securities or items are returned.

Why the property might be in another state

Holders send property to the state of the owner’s last known address. If you’ve moved, your property may be in a state where you used to live. If the holder had no address at all, it usually goes to the state where the company is incorporated. That’s why we ask clients where they have lived and worked.

What happens to stocks and securities?

States often hold securities for a period and may then sell them. If that happens, the owner is generally entitled to the proceeds of the sale. Rules vary by state, which is one reason securities claims can be more complex.

Getting it back

Returning property to its owner is the whole point of the system, but the state releases it only once ownership has been proven to its standards. Building that proof is the core of every claim we handle. See how we handle claims, or read about the states where we work.