Based upon a recent report, by KCRA-TV 3 of NBC. On March 3, 2023, the California State Controller’s Office affirmed that it is currently holding Unclaimed Property valued at $11.9 billion. [Yes BILLIONS of dollars] It’s important to note that the California State Controller’s Office does NOT deal with real estate.
You may be an owner of some of those unclaimed funds.
California’s Unclaimed Property Law (Code of Civil Procedure Sections 1500-1582) requires associations, businesses, corporations, financial institutions, insurance companies, and other entities, to record and send property to a state depository for safekeeping. If there is no activity on the account, or if the owner can not be contacted for three years or more.
Read on to learn more about the frequently asked questions concerning California’s Unclaimed Property Law.
What Is Unclaimed Property?
An asset that is left inactive or dormant by the owner after a defined period of time, usually three years as stated by California law, is considered unclaimed property.
The Unclaimed Property Law of California does not include real estate. Gift certificates that have not been used are also normally excluded from unclaimed property and are not reported to the state.
| Common types of unclaimed property are: | |
| Bank accounts | Certificates of deposit |
| Estates | Matured or terminated insurance policies |
| Mineral interests and royalty payments | Stocks, mutual funds, bonds, and dividends |
| Safe-deposit box contents | Trust funds and escrow accounts |
| Uncashed cashier’s checks and money orders | Wages |
How Do States Get Unclaimed Property?
The Unclaimed property law of California requires the holder, ie. corporations, businesses, associations, financial institutions, insurance companies, and other entities to report and deliver inactive properties to government depositories annually if the property owner can’t be located.
As specified in the law, if the property or account has no activity or the owner can not be contacted for three years, it is considered as unclaimed property.
In some cases, the owner forgot that the account exists, or changed their location, did not leave a forwarding address, or the forwarding order expired. Oftentimes, the owners of these properties die and their heirs do not have any knowledge of the property until contacted by an Investigator.
How Do I Prevent My Property From Being Turned Over To The State Controller’s Office?
There are several ways to prevent your property from being turned over to the State:
- Cash your dividend, interest, or checks at once.
- Make accurate records of all financial accounts and review them annually
- Keep annual activities on accounts
- Be aware of all of your accounts
You should also provide your financial institutions with primary, secondary, or tertiary contacts. Also, acknowledge notifications from the business or the State Controller’s Office at once if notified, or your property may be transferred to the state if you do not contact the business within the given period.
What Will Happen To The Contents Of My Safe Deposit Box?
The State Controller’s Office will be notified about the contents of your safe deposit box if after three years the bank can not contact you. The contents will then be transferred to the state controller’s office. After 18 months from being reported to the SCO, it may be sold at an auction.
The net proceeds made from the sale will be credited to an account under your name, less any bank liens, and will be paid to you if you or your representative files a valid claim. The California State Military Museum will be entrusted with all properties that relate to California’s military history.
Since May 22, 2006, the State Controller’s Office has not sold any properties at an auction. They also have not destroyed any properties with no probable commercial value since May 16, 2006.
What Will Happen To My Investment Accounts ( i.e. Stocks, Bonds, Mutual Funds) If I Do Not Maintain Contact With My Broker Or The Company In Which My Funds Are Invested?
The State Controller’s Office will temporarily hold investment accounts for safekeeping. It is required by law to sell the securities, not earlier than 18 months and not later than 20 months after being turned over to the State Controller’s Office.
The net proceeds will be credited to an account under the name of the owner until a valid claim is filed.
Why Does California Have An Unclaimed Property Law?
The Unclaimed Property Law was created to protect consumers. It prevents businesses with unclaimed property from keeping consumers’ money and using it as business income.
The law provides the citizens of California a single source, to track unclaimed property that may be reported by businesses from across the nation and allows the state to return the property, or the net proceeds from any legally necessary sale of the property, to its rightful owner or heirs.
What Efforts Are Made To Find Owners?
Holders of unclaimed property, such as corporations, businesses, associations, financial institutions, insurance companies, and other entities are mandated by the law to attempt to contact the owners before reporting the unclaimed property to the State Controller’s Office.
A notice will be sent by the holders to the owner’s last known address notifying them about the account being transferred to the State Controller’s Office for safekeeping. If the owner does not contact them and inform them of what to do with their property.
For the unclaimed properties received between 1990-2007, the State Controller’s Office, as stated by law, was allowed to inform only those owners whose address disclosed by the business was different from the address the owner filed with the Franchise Tax Board.
The State Controller’s Office was effectively barred from contacting about 80% of property owners as a result of these restrictions. The State Controller’s Office is presently going through this property and without restrictions notifying all owners who have a current address, through the Franchise Tax Board.
The State Controller’s Office since 2008, has been able to give notices to any property owner whose property is likely to be transferred to the state. These notices are sent out prior to the property being transferred.
Does The State Contact The Heirs If The Owners Of Unclaimed Property Are Deceased?
No, the heirs will not be contacted if the property owner is deceased. The business that holds the property only reports the name of the owner. The SCO does not determine if the owner has died nor who their rightful heir might be.
It is recommended to search for property of anyone where the relationship may qualify you as their heir. If you are the rightful heir, you or your representative may file a claim for the property.
How Do I Find Out If I Have Unclaimed Property?
Owners or heirs of unclaimed property can search for their property via the California State Controller’s Office (SCO) Website.
If the information you supply matches the online data, possible ownership may be indicated. Always note that there might be people that have the same name as yours, so the property listed might not be yours. Your ownership will only be determined after verification documentation is submitted and approved by the SCO after you file a claim.
Where Do I Go To Search For Unclaimed Property Held By Other States?
The National Association of Unclaimed Property Administrators (NAUPA) website is a good place to start looking for Unclaimed Property owned by other states.
Where Do I Go To Search For Unclaimed Property Held By Other California Government Agencies?
A good place to start searching for your unclaimed property held by other California Governments agencies is through their website.
As an example, California State Teachers’ Retirement System (CalSTRS) website holds all the unclaimed property by CalSTRS which includes uncashed and returned checks, unclaimed survivor benefits, and dormant accounts.
The Business Where I Had My Account States That It No Longer Has A Record Of It. What Do I Do?
Any statement or original document from that account should be located and presented to the business or financial institution for evaluation.
If the institution states that they can not find a record of your account, contact the State controller’s Office.
Important note:
If you think you have an account that did not appear in the search results, go back to the State Controllers Office site at a later date. Names are added weekly to the California Unclaimed Property database. You can also search under the name and/or address you had at the time you had that account.
How Do I Claim Property That Was Transferred To The California State Controller’s Office?
The rightful owner or their representative must file a claim with the California State Controller’s Office.
Is There A Fee?
There is no fee when you file directly with the California State Controller’s Office. However, if you are being represented by an investigator you may be charged with a fee.
Meanwhile, Investigators also referred to as Asset Locators or Heir Finders and will charge you a fee. According to California law, investigators can not charge a fee greater than 10% of the value of the inactive properties that have been returned to you.
Most Investigators in California charge a fee of 10% for unclaimed funds recovery.
County Probate Estate claims in California have no maximum fee restrictions, and fees of 30% or more are not uncommon.
Will I Be Paid Interest On The Property For The Time That The State Controller’s Office Held The Property?
The California Unclaimed Property Law was amended in August 2003 to remove the payment of interest. So, no you will not be paid interest on the property for the time the State Controller’s Office held your property.
Am I Entitled To Any Dividends Or Stock Splits For My Securities While They Are Being Held By the State Controller’s Office?
While the stock is being held by the California State Controller’s Office for safekeeping, the property owner or heir is entitled to the benefits of any corporate activities made by the issuing firm, such as dividends, mergers, and stock splits.
If the California State Controller’s Office sold your securities as required by California’s Unclaimed Property Law, you are entitled to the net profits of the sale as well as any dividends, interest, or other increments realized before the assets were sold.
How Do I Donate My Unclaimed Property To The California Government?
To donate the unclaimed property to the State of California, the probable owner must submit a claim for the property and prove entitlement. A written allocation of the fund can be made at the time of filing a claim.
If no specific allocation to a specific fund or appropriation is made, the donation will be sent to the State School Fund, according to California law.
What if I Owe Money To A State Or Local Agency; Will That Affect My Claim?
According to California Government Code Section 926.8 and 12419, the Franchise Tax Board is allowed to intercept payments from the state lottery, tax refunds, and unclaimed property funds for debts owed to state, city, or county agencies.
Even if you are under an installment plan with the tax entity, the State Controller’s Office will still intercept the amount owed. You may contact the agency indicated on the intercept notice if you have any concerns or disagree with the intercept. The reason for the intercept is unknown to the State Controller’s Office Of Unclaimed Property, and they will be not able to make any changes to the disbursement of funds.
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