States bolster budgets with unclaimed property; suits contest seizures
Some states are changing laws and hiring auditing firms to find and seize unclaimed property such as neglected bank accounts, uncashed paychecks and unredeemed life insurance policies.
In Delaware, unclaimed property is the third largest source of revenue, accounting for more than 13 percent of the budget, the Associated Press reports.
Lawsuits call attention to state seizures. One suit, filed by two French chemists, says Delaware seized control of their stock in a company formed to develop their drug to treat hepatitis B. Delaware sold the stock for $1.7 million; it was valued at $13.7 million when Merck bought the company in 2014. Delaware paid the researchers $1.7 million, rather than the higher figure. The suit seeks $12 million from Delaware, according to this Inside SALT blog post.
Another suit filed against California in 2001 claimed the state did too little to notify property owners about unclaimed property. Lawmakers passed a new law governing the process after a federal court halted the process; the San Francisco-based 9th U.S. Circuit Court of Appeals ruled for the state in March.
The story lists these actions by states seeking quicker and easier access to unclaimed property:
• In Pennsylvania, the legislature lowered the amount of time that has to pass before property is considered abandoned from five years to three years.
• In Delaware, the state no longer had to contact shareholders before considering their accounts to be abandoned. Before 2008, stock accounts weren’t considered abandoned unless mail sent to the owners was returned as undeliverable.
• Beginning in 2005, Minnesota was no longer required to send letters to residents notifying them the state had seized abandoned money. The state does, however, try to raise awareness of unclaimed property with booths at state fairs.
