Have you heard the one about the former janitor who left more than half a million dollars unclaimed in Louisiana treasury coffers? His company had given him stock options years ago, and he wasn’t aware of it until he got a call from state officials.
Or how about the heirs in Illinois who got a call seven years after their loved one passed, saying they were owed a payout from an unclaimed life insurance policy?
If you’re thinking that you’d never be unaware of where your own money is, you might be in for a surprise. More than $43 billion in unclaimed cash and property sits in state treasuries, waiting for the owners to claim it, according to the National Association of Unclaimed Property Administrators (NAUPA). This money takes many forms, but the most common sources are old bank and retirement accounts, unclaimed wages, stock certificates, utility deposits and insurance payouts. That last one is often due to the fact that people rarely call up heirs and say, “Hey Alice, I named you beneficiary on my life insurance policy.”
Good news: Searching for unclaimed money is free and simple. However, be forewarned that there are paid search scams out there that you’ll want to avoid. If you get an email or letter implying it’s from a state treasurer and asking for personal data, contact the office independently to ensure it’s legitimate.
Where to look
So, how do you avoid losing track of your hard-earned assets in the first place? Consider consolidating your assets. Nowadays, financial services firms offer both banking and investing accounts through a single login, allowing you to see an overview of all your accounts in one spot.
Consolidating accounts helps you understand your net worth, manage your investments, determine how much retirement income your portfolio is providing and help you and your financial advisor assess the need to rebalance. It also may make calculating and setting up required minimum distributions (RMDs) easier when you hit age 70½.
Finally, gathering your major accounts into one tidy spot makes matters easier on your heirs should anything happen to you. If you use password manager software, user names and passwords will be shared with the trusted person you’ve named in the event of your death or incapacity. Alternatively, you can leave behind a physical list hidden in a safe place.
Those who prefer not to consolidate accounts can instead try financial software that allows you to connect a collection of assets and liabilities from different institutions, offering a comprehensive view of your finances. This makes monitoring accounts simpler and may even help you to identify and pursue your goals. However, you still need to regularly update the application with any new accounts.
The most sophisticated tools will allow you to input your financial information and see the big picture in charts, run “what if” analyses, stress test your portfolio and more.
Now that you know where to look, follow the online trail to discover any missing money. Start with a quick search of state treasury websites, and if you do find abandoned assets, consider folding them into one consolidated account.
Also, keep in mind that your financial advisor can help guide you in organizing your assets in a way that makes sense for your plan while also making things easier for beneficiaries. You can also turn to her or him for technology that offers a clearer view of what you own – no detective work required.
Source: “Man hits jackpot with unclaimed property,” fox8live.com; Illinois State Treasurer’s Office; unclaimed.org; pewtrusts. org; California State Controller’s Office; Kiplinger; U.S. News & World Report; The New York Times; Forbes; news.ku.edu
The process of rebalancing your portfolio may result in tax consequences.
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