Payment of Claims
The processes for paying claims are outlined below. The claimant/heir or investigator submits a formal claim package for recovery of the unclaimed funds.
Upon approval of the claim. The payment is matched to the claimant’s Social Security number or tax identification number.
When the claimant/heir lives in another country, additional payment processes may be considered.
Prior to submitting the claim, the claimant and the investigator must agree on the recovery fee, which in California cannot exceed ten percent (10%) of the claim’s worth. The typical recovery fee in California is 10%. However there are no limits on California’s probate funds, and the recovery fee often exceeds 30%.
The SCO compensates the following claims made by investigator and heir finding companies:
The State Controller’s Office will mail via USPS two warrants for each claim if the wording in the Investigator Agreement expressly distributes a part of the money to the investigator/heir finder.
One warrant will be issued immediately to the claimant for his or her agreed-upon portion, and the other will be mailed via USPS directly to the investigator/heir finder for his or her agreed-upon percentage.
The following is an example of agreement language that would allow for the mailing of two warrants: “Claimant assigns to the Investigator a percentage of 10% of the net assets which the Claimant in fact recovers.”
When the claim is approved, the claimant will receive a letter informing them that they will be receiving payment directly from the State Controllers Office.
Payments for unsold securities divided between the investigator and the claimant will only be made in full share increments. The owner’s shares will be rounded up if the share split results in a fraction. If the investigator/heir finders are entitled to an additional fraction of a share under their contract, it is the duty of the investigator/heir finder to collect this money directly from the owner.
The claimant will get a letter from the State Controller’s Office advising them that the rounding up of fractional shares in their favor does not free them of any other contractual obligations they may have with the investigator/heir-finding company.
A safe deposit box’s contents will be shipped directly to the claimant. The contents of the box can only be given to one claimant.
Interagency Intercept Program
If a claimant owes a debt to a state agency, city, or county in California, the payment will be intercepted and reduced by the debt amount. Any excess claim payment balance will be paid to the claimant.
The Franchise Tax Board’s Interagency Offset Program began on September 2, 2009, to offset all-cash claims and claims paid with proceeds of liquidated stock.
The FTB will issue a notice letter to the claimant if the claim is offset; the investigator will not be informed. This method will not influence the investigator’s payment if the Investigator Agreement expressly assigns a part of the money to the investigator/heir finder. The full payment will be subject to the offset if the Investigator Agreement does not specifically designate a percentage to the investigator.
Claimants should direct their questions to the agency mentioned in their offset letter. The SCO is only given basic information about the offset and is unaware of the offset until it occurs.
Report of Interest Income
The Unclaimed Property Law no longer allows for interest to be paid on claims as of August 2003. The State Controller’s Office is obligated to send a 1099 Form stating the amount of interest paid to an owner of unclaimed property for claims paid or approved prior to July 21, 2003.
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