Who wouldn’t like to discover we were just a little bit richer than we thought? Uncovering a stash of unclaimed money can be a gratifying experience for even your highest-net-worth clients.
“High-net-worth clients are no different than anybody else, whether it’s a few hundred or several thousands of dollars of unclaimed money,” says David Schneider, a CFP in New York. “It’s found money, truly, and they’d rather have it than not have it.”
Unclaimed money essentially hides in plain sight: abandoned bank and investment accounts, uncashed dividend checks and paychecks, tax refunds and funds due from canceled insurance policies.
An estimated 2.5 million claims totaling $2.5 billion were returned to rightful owners in 2012, according to the National Association of Unclaimed Property Administrators. The amount of the average claim was $892 — although, of course, wealthy families may be more likely to lose track of greater sums.
“This is something you can do quickly to provide a client with tangible benefits,” says Schneider. “It generally takes less than five minutes to initially find any unclaimed funds that may be out there.” Schneider offers a few tips for advisors who want to help help clients locate and recover unclaimed funds:
1. Look online. Missingmoney.com, a site endorsed by the National Association of Unclaimed Property Administrators, lets you search in many states at once, free of charge. If your client’s state of residence is not listed there, unclaimed.org has links to unclaimed-fund programs for each state.
2. Be thorough. Search in all states where the client may have lived; funds may have gone missing many decades ago. Search maiden names, trusts or any businesses the client may have owned.
3. Include client family members. Performing these searches is a good way to facilitate an introduction to these family members, who could become future clients.
4. Verify before filing. Be sure that the funds in question really belong to your client and not someone with a similar name. Claiming funds that don’t belong to you is fraud. Any money the advisor helps locate must by law necessarily go to the client directly.
5. Document carefully. The documents required to complete the claim will vary depending on the amount of money involved and how much information the state already has. Failure to provide proper documentation will almost certainly delay the processing of your claim; no unclaimed-property administrator wants to pay out funds to anybody other than the rightful owner.
When the amount of money is particularly small, the hassles involved in a claim may not be worth it, Schneider says. Yet he suggests that advisors conduct searches for unclaimed funds when onboarding new clients, and periodically as well: “This is a fairly easy process in most cases.”
Bruce W. Fraser, a New York financial writer, has contributed to CNBC.com, The New York Daily News and the Christian Science Monitor.
Register or login for access to this item and much more
All Financial Planning content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access