Rest assured, this is not the last post we will ever devote to unclaimed property. We are wrapping up this series with neither a bang nor a whimper, but we do have good news.
In our last post, we were talking about how much work the state will do to find the owner of unclaimed property transferred from holders (banks, insurance companies, etc.). In California, the state makes one effort to notify the owner and then waits, patiently, for the owner to come to the state.
The good news is that the state is just holding onto the property. The unclaimed property that the state receives at no time becomes the permanent property of the state.
The not-so-good news, however, is that the state is just holding onto the property for a little while: 18 months after the holder transfers it. After that, the Controller has the power to auction off the property. There is no requirement to do so, just the option. The proceeds from that sale then go into the state’s Abandoned Property Account until the end of the month.
The funds in that account support the operations of the Unclaimed Property program, and that includes paying out to the owners or heirs if they come forward. At the end of the month, the Controller transfers all but $50,000 of the funds to the general fund.
This isn’t chump change, either. The state estimates that it is holding in excess of $7 billion in Unclaimed Property that belongs to almost 28 million people and organizations.
Finally, unclaimed property does not always land at the State Controller’s Office. The federal government has its own database of unclaimed property, including tax returns. Estimates for this account run into the tens of billions of dollars.
Source: California State Controller’s Office,Unclaimed Property Program FAQs, accessed March 6, 2015