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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.

How accounts become 'abandoned'

Perhaps you move and your bank doesn't get your forwarding address. Or you buy savings bonds and forget about them. Or a long-unused account is in the name of a child or a deceased relative.

For example, David R. Okrent, a Long Island, N.Y., elder-law attorney, has 11-year-old triplet sons. He says: "They have accounts in their names that they don't touch. Nothing really happens for a year at a time."

So far, they've managed to stay off the "abandoned" list. "We'll get a letter from a bank once a year" requesting verification that the accounts are still active, Okrent says.

When people change jobs, they can lose track of retirement accounts from their previous jobs. With paperless accounts, there's no statement to remind them. And if an account was connected to an old work email account, the account administrator may not be able to reach the owner.

Foss had clients get $25,000 in stock a couple of years after their parents died. None of the survivors knew about the account, and it was about to be taken by the state of California when the state sent an unclaimed-property letter.

Checks are even easier to lose than entire accounts. In Okrent's experience, it's generally not an entire account that gets lost. "Usually a client says, 'I found a $25 check,'" he says. "It's usually health insurance that pops up, reimbursement for a bill. I've found income tax refunds for clients."

Unclaimed-property laws vary by state

All states have laws regarding abandoned or unclaimed accounts, including requirements that financial institutions try to find you. The biggest differences among state laws are in the dormancy periods -- how much time you have to claim your account before it is turned over to the state. An account is considered dormant if there's been no activity initiated by the account holder over a stipulated period of time.

How hard will financial institutions try to find you? "Only to the extent the governing law forces them to assist you," Foss says.

A bank's effort may consist of one letter sent to the last address it has on file. If the bank doesn't hear back, the escheatment process could begin. That's the process by which your account is converted into assets owned by the state.

Several states in recent years have passed laws changing dormancy periods. New York, for instance, reduced the dormancy period for property held by banks and miscellaneous properties from five to three years as of April 1, 2011. Hawaii, on the other hand, in 2010 increased the dormancy period for gift cards from two to five years -- meaning that a gift card in Hawaii (and some other states) is protected longer from escheatment than bank accounts in other states. Also in 2010, New Jersey sharply reduced the amount of time before a traveler's check is considered unclaimed, from 15 years to just three.

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The good news is that the purpose of escheatment laws is not to enrich state coffers at consumers' expense. As frustrating as the process may be, the laws are intended to prevent businesses from keeping unclaimed property as business income and to help consumers find and reclaim their property.

"The (unclaimed-property law) provides California citizens a single source, the state controller's office, to check for unclaimed property that may be reported by businesses from around the nation and enables the state to return property, or the net proceeds from any legally required sale of the property, to its rightful owner or their heirs," Foss says.

How to avoid forfeiting your assets

You can make sure your property doesn't land on the abandoned list by following these rules:

  • Know where your property is held, and make sure the holder is just as aware of you and your whereabouts. Foss recommends keeping a list of all your accounts (without account numbers), including bank accounts, securities interests, stocks, mutual funds, insurance policies, safe-deposit boxes, employers, rent and utility deposits, and contact information for each institution or company. "Maintain contact with financial institutions and companies by notifying them of address changes, name changes or changes in ownership due to a death or divorce," she says.
  • Give a copy of this list to a trusted adviser or family member. Property can easily be lost when someone becomes incapacitated or dies.
  • Never leave mail unopened, even if it looks like just another statement. It might be that one letter asking you to claim your account. If it is, and you have confirmed the letter is legitimate, reply by mail -- not by phone -- and keep a copy of your correspondence. Sending mail with proof of delivery isn't necessary, Okrent says, but can provide an additional level of comfort.
  • Check periodically for unclaimed property in your name and the names of your dependents and deceased family members. Every state has a program, such as New York's Office of Unclaimed Funds Online Claiming Program, set up to reunite lost accounts with their owners. Or visit NAUPA's website and click on the state you live in or any state where you may have property. The site also has links for inquiring about federal money, such as tax refunds, and money held in Canada.
  • Consolidate or close old accounts. Roll 401k plans from former employers into an individual retirement account and close inactive bank and brokerage accounts. Having fewer accounts simplifies your life.

You don't need to pay anyone to help you get your money back. Okrent has heard of companies that say something like "For a third, we'll get you your abandoned property." But that's not necessary. "In New York, it's pretty simple," Okrent says. "You just file for it."

Huff says: "Beware of banks. In many cases, accounts may be thought to be abandoned when the customer has done everything right. Very frustrating and feels like I should keep my savings under my mattress."

Of course, Huff isn't sleeping on a lumpy, money-stuffed mattress yet. She is taking more precautions, however. "One thing I do different is I make them make me a copy and I put it in my file folder. You go to a bank and they say, 'Sign this, sign that.' I keep a copy of everything I sign."