Our federal government is holding hundreds of billions of dollars of it. The state of New York has about $11 billion worth, while the states of California and Texas together claim another $10 billion of it. As for our local governments, it’s estimated they are holding approximately $23 billion of the stuff. What is this stuff they’ve got? Escheated property.
During a time when many businesses have cut costs and are watching every dollar they spend, it may come as a surprise that our federal, state and local governments are holding enormous amounts of escheated property – money and property belonging to businesses and individuals just like you.
When folks hear these staggering statistics, the questions that follow are usually the same. Do they have anything that belongs to me or my company? If so, why do they have it, how did they get it and, most importantly, how do I get it back?
Escheatment laws (otherwise known as unclaimed property) originated in common law and were borne from the notion that everything was ultimately owned by the King. Today, though the laws vary from state to state, all generally require that property be turned over to the government after a certain period of time has elapsed and efforts to return the property to its rightful owner have yielded no results.
Property which must be escheated takes many forms, including:
- Payroll
- Overpayments received
- Bank accounts and safe deposit box contents
- Stocks, mutual funds, bonds, and dividends
- Uncashed cashier’s checks or money orders
- Certificates of deposit
- Matured or terminated insurance policies
- Estates
- Mineral interests and royalty payments, trust funds, and escrow accounts.
Abandonment periods vary by property type, but typically range from 1 to 15 years.
Every company doing business in the State of Texas is required to review its records annually for property belonging to third parties. The reporting period is July 1 – June 30. Every July, holders are required to mail a notice to all owners of property over $250 that are due to be included in their report. Holder reports and payments are due each November 1. For more information on reporting requirements and procedures, including forms, guides, and software, please visit the Comptroller’s website.
The state of Texas estimates that 1 in 4 of us has unclaimed property. And just last year alone, the state returned more than $165 million to its rightful owners. So, how can you find out if you have unclaimed property in Texas? The process is simple – go to the Unclaimed Property Search Engine, and enter the required information. Most states have a similar online property search.
Discovering that you or business has unclaimed property is the easy part. Retrieving the property can require considerably more effort. Although the claim process may seem relatively innocuous, many claimants often find that the documentation requirements are so onerous that it may not be worth their time. Depending on the type of property involved, states may ask a claimant to produce documents that are 10 or more years old, many of which have already been shredded or lost. However, assuming the documentation is readily available; it must be provided to the state in question for review and processing. If approved, most states, Texas included, typically charge a small handling fee for refunding your property.
MAXIMUSalliance’s Recovery Audit professionals are experts at identifying, validating and recovering money for companies that have made over payments to third parties, including vendors and state and local tax agencies. We can help your business retrieve these funds BEFORE they end up in city, state, or federal coffers.
