State Rep. Sharon Tyler: Forgotten cashPublished 1:39pm Tuesday, October 5, 2010
A recent change in the state’s unclaimed property law regarding dormancy periods should make residents take notice.
A child’s inactive savings account, a forgotten security deposit, a deceased grandmother’s unidentified safe deposit box. Each of these, and many other scenarios, creates unclaimed property. Formerly, the property would be declared abandoned and turned over to the state to hold after the account was inactive for five years for most unclaimed money, and seven years for money orders. Now it is three years.
Why the change, and what happens to the money? The change was made to generate revenue to help balance next year’s budget. When money goes unclaimed, it is turned over to the state treasurer who acts as a custodian. The state is now able to spend this money until it is claimed. Unclaimed property always belongs to the rightful owner, however, and the state repays individuals once they make a claim that is verified, with no time limit.
This one-time fix for our state does not address important structural changes which need to be made. It is just one more version of kick the can, instead of true reforms.
In light of this, I am currently working on finding ways to bring awareness to unclaimed property earlier in the process during financial transactions. I would like to make sure banks, insurance companies, landlords and other property holders clearly inform their customers of the rules and regulations surrounding unclaimed property at the beginning of their relationships. As soon as a person begins a transaction like opening a bank account, they should be unmistakably informed about what will happen if there is no activity on their account after three years; and if the bank cannot reach them at their current address or phone number.
I also encourage everyone to keep an ongoing list of their financial and insurance holders, and make sure they notify these companies if they have a change of address or phone number.
If you think you have unclaimed property, be sure to check the Treasury’s website at www.michigan.gov/treasury and click under the unclaimed property button to search for it.
As I mentioned earlier, there is no time limit or fee for claiming these funds once the state has custody of your unclaimed property. But the process certainly takes longer than a bank withdrawal. With these changes in dormancy periods, everyone needs to know the rules earlier in the game.
I look forward to hearing your comments on these important issues. Please feel free to contact me by calling (888) 373-0078 or e-mailing firstname.lastname@example.org.