You don't think of your bank or brokerage account as "abandoned" just because you haven't made any transactions lately. You assume it's still there, waiting for you. You could be wrong.
Agnes Huff thought she'd done everything necessary to claim her account when her bank was taken over by another bank. Alas, her account -- a certificate of deposit worth five figures -- still ended up on the "abandoned" list.
"Somehow, the new bank 'lost' that paperwork," says Huff, the president of Agnes Huff Communications Group in Los Angeles. "I got a phone call and verified my information, thinking it was done. Well, a week later, I get another call that they are going to take my money because they can't find me.
"I stormed into the bank and showed them my copies of all my correspondence, that they had my right address and phone, and that to threaten to take away my hard-earned money was theft. The manager claimed it was just their procedures but could not account for what happened to my submitted correspondence or resolution with the phone call."
Huff got her account back, but not everyone does.
At least $33 billion, belonging to almost 2 million account holders, is currently being held by state treasuries and other agencies, according to the National Association of Unclaimed Property Administrators, or NAUPA.
It's easier now than ever to reclaim so-called abandoned accounts, but only a small percentage of that amount is reclaimed in any year. NAUPA says less than $2 billion, about 5%, of the balance was returned to owners or their heirs in 2006 (the latest year for which it provided statistics).
The rest of the money stays in state coffers, earning interest for the states. Owners may eventually get their money back, but in most cases states keep the interest earned while they held the cash.
Kimberly Foss, a financial planner and the president of Empyrion Wealth Management in Roseville, Calif., gets one or two requests per year from clients who want help with abandoned-account matters.
She says it's fairly common for people to have to prove that they own an account to keep it from going to the state.
Unfortunately, under state law, they may have technically abandoned their accounts. In the worst-case scenarios, their assets could simply go to the state treasury, and they might never figure out how to get it back or even know it was gone.
