Just as Bad as Kelo, But Much More Common
I've had savings accounts that made a bit of interest, balance slowly growing, for years. I didn't necessarily add anything to it (preferring to use new money to diversify in stock mutual funds or annuities or what have you), and neither did I take anything out. I'd get a savings statement a few times a year, check the numbers, feel a pang of doubt (should've bought those Google shares in 2002!), then decide to be happy with seeing at least one part of my, um, vast fortune accrue the safe and steady way.
In fact, with one or two of a handful of mutual-fund accounts I own, I exhibit the same pattern — I've made no deposits or withdrawals for years straight.
Turns out, that's an open invitation for a gang of criminals to take it all away with impunity. These thieves and robbers happen to work for your state's tax office, and their salaries are paid by the very people they're robbing blind. With thanks to Martin Owens for the tip, echoes of Kelo:
States regard property as "unclaimed" if the owner hasn't had contact with the custodian of an asset for a specified period of time. In the case of bank deposits, depending on the state, that means three to five years without deposits, withdrawals or any other customer contact. For stock, it's three to seven years without cashing dividend checks, voting proxies or otherwise contacting the issuer or brokerage.
Delaware, the legal home to many big companies, is an aggressive collector of such assets. State officials examine corporate accounts, looking for uncashed checks and credit balances. Unclaimed property has become Delaware's third-largest source of revenue, generating $365 million in the fiscal year ended June 30, 2007. That amounts to about 11% of state revenue, more than corporate-income tax or the state lottery.
Delaware is one of the states that don't make much effort to seek owners of unclaimed property. It's up to the owners to figure out if states have their assets and to file claims. If owners don't come forward, many states keep the cash and sell physical property, such as jewelry from safe-deposit boxes, on eBay.
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