Many of the country’s states are looking at unclaimed property and the funds associated with them to help them with their budget deficits also known as Unclaimed Property Divisions.
According to the Center on Budget and Policy Priorities regarding the 2010 budgets, 48 states have addressed shortfalls in their proposed budgets, which total $192 billion dollars or 29% of state budgets – the largest monetary gap on record.
With a deficit of this magnitude, states are looking for ways to generate revenue to help the budget deficit; states are looking at Unclaimed Property Divisions to help loosen the noose that is steadily strangling them.
The main reason unclaimed property funds is looking like a relevant solution to help lessen the deficit is because only about 1/3 of the money unclaimed actually finds its way to the rightful owners despite the fact that each state claims that it takes aggressive steps or efforts in locating the owners.
There are dozens of Agencies and Organizations that those funds could be in. The Unclaimed Property Division of that agency then holds these assets in trust for their rightful owners until it can locate them and return their property. The Unclaimed Property Division usually will send out a letter to try to locate the individual(s), many times, unsuccessfully. There are many states where they are not required by law to let the individual(s) know that monies are available to them.
While the unclaimed property funds are sitting in the state coffers, the states are tapping into those funds and using them. They do not want that money to be found because after a statutory period, many states keep or escheat those funds and then can do or use those funds however they please.
The National Association of Unclaimed Property Administrators (NAUPA), declare that state treasurers and other agencies have a total of at least $32.877 billion that is currently being safeguarded for 117 million accounts.
Many states have already put into effect laws that allow them to take unused gift card money even if it has no expiration date. In New York alone, the amount they collected was $9.6 million for the year 2008 (Please see other blog on Gift Cards: They do expire).
It is only a matter of time before states have passed additional laws that give them the authority to take these funds.
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