What is Abandoned Property
Abandoned property is an asset that has been turned over to the state after several years of inactivity. States have abandoned property divisions that focus on the management and recovery of unclaimed property. Generally assets are turned over to the state after two to five years of inactivity.
BREAKING DOWN Abandoned Property
Abandoned property assets can include a wide range of property types. Assets may include real estate, land, life insurance policies and safe deposit boxes. Assets in financial accounts such as stocks, bonds and mutual funds may also be considered abandoned if no activity has occurred on the account within a specified timeframe.
Some states hold such property and allow the original owners and heirs to claim it indefinitely. In other states, if the property goes unclaimed for too long, it may become the state's property through a process known as escheatment.
State Laws and Abandoned Property Divisions
In the United States, state laws determine when an asset is legally considered abandoned. In Massachusetts, for example, a bank account that has seen no activity for more than three years will be turned over to the state.
States have abandoned property units that focus on the collection, management and dissemination of abandoned property. These divisions allow property to be channeled to a state organization rather than the company where it is held or was issued. In many cases the assets that are abandoned will be auctioned or converted to cash for more convenient safekeeping. Assets maintained by each state can be used for supporting the state’s activities. These assets generally include only a small percentage of the state’s revenue at less than 1%.
Retrieving Abandoned Property
The National Association of Unclaimed Property Administrators (NAUPA) was formed to help support consumers in retrieving unclaimed property assets. In partnership with state organizations, NAUPA has built a database that allows consumers to check government records for unclaimed property in any U.S. state where they have lived. Individuals can search for unclaimed property through state-sponsored websites, as well.
Owners of unclaimed property can easily reclaim their assets by filing a claim with the appropriate state. States have processes in place for actively locating owners of unclaimed property. They may search government records to identify and locate individuals, often contacting them through various means. Typically only half of a state’s unclaimed property is reclaimed each year, providing some additional revenue for U.S. states through the assets of unclaimed property.