Ann Terranova Financial Advisor

Everyone Likes to Find Money!

When I approach a financial plan, the first thing I do is work to find money for people by re-arranging the components of their existing financial picture more effectively. Unlike behavioral strategies such as spending less or earning more money, these structural strategies don’t require any effort or lifestyle choices. It’s just like finding money!

A common structural strategy is using a pre-tax contribution to a retirement plan to save money. Saving money on a tax-advantaged basis means that the same amount of money earned can build up a lot faster. It shifts the entire accumulation curve in a positive direction and you didn’t have to work any harder to do it. Reducing unnecessary or ineffective investment or insurance costs is another structural strategy. I once saved a client $500,000 by recommending he not buy a single-premium whole life insurance policy because he actually did not need it to accomplish his objectives!  (By the way, it took me fifteen minutes to accomplish this – ask me how…)

Here is a simple way to find money that everyone should know about. Check for any unclaimed property that the state may be holding for you. Every state operates a division of unclaimed property. In the State of California, the Unclaimed Property Division is operated by the Controller’s Office.

According to their website, the State of California is currently in possession of more than $6.1 billion in Unclaimed Property belonging to approximately 17.6 million individuals and organizations.

The State acquires unclaimed property through California’s Unclaimed Property Law, which requires “holders” such as corporations, business associations, financial institutions, and insurance companies to annually report and deliver property to the Controller’s Office after there has been no customer contact for three years. Often the owner forgets that the account exists, or moves and does not leave a forwarding address or the forwarding order expires. In some cases, the owner dies and the heirs have no knowledge of the property.  The most common types of Unclaimed Property are:

• 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.

The Unclaimed Property law was enacted to prevent holders of Unclaimed Property from using your money and taking it into their business income. This law gives the State an opportunity to return your money and provides California citizens with a single source, the State Controller’s Office, to check for Unclaimed Property that may be reported by holders from around the nation. To find out if any of this money belongs to you, search the Unclaimed Property Database at http://scoweb.sco.ca.gov/UCP/

When you search the Unclaimed Property Database, you will want to include a search using any prior name you have had. You will also want to check each state database for any state in which you have lived. These departments are operated on a state by state basis and there is no cross-referencing of databases.  Google each state “unclaimed property’ to find the appropriate website.  You can also search on behalf of your parents, other family members or friends, however only the real owner of the property can claim it.

Claiming the property can be a simple task including sending the Department a copy of your driver’s license and Social Security card. It could be more complex if the unclaimed property has been transferred through an estate. Sometimes unclaimed property has been held by the state for multiple generations in which case documenting the transfer may be very complicated.

Even when you have sent in all of the appropriate documentation, don’t hold your breath. A client of ours recently got a notice from the Controller’s Office stating that the processing time is currently running in excess of 180 days! However, for the small amount of time it may take to organize the documentation, it is still your money and you have a right to claim it.

The financial planning process is often like scrubbing your entire house from top to bottom, organizing your kitchen cabinets, and installing that family entertainment room you’ve always wanted. And in the end, the objective is for you to have more money than when you started.