Income escheated: What Happens to Your Forgotten Bank Account?

Did you ever have a bank account you forgot about, and then wonder what happened to the money if there was any left? This article explores what happens to unclaimed bank accounts, the role of the state, and how you can potentially reclaim your funds.

What Happens to Forgotten Bank Accounts?

It is a common misconception that money in a forgotten bank account is lost forever. In reality, most jurisdictions have laws that require banks to notify the government after a certain period if an account has been inactive. Typically, after 3 to 5 years of no activity, the bank will forward the information to the state's unclaimed property agency. If the account holder does not take action to reclaim the funds, the money becomes part of the state’s general fund, which is then used for public expenditure.

Search for Unclaimed Funds

There are several ways to check for and potentially reclaim your forgotten funds:

Online Search Facilities: Many states and provinces maintain online search facilities allowing individuals to search for any unclaimed funds. You can type in "unclaimed funds your state" in a search engine to see if you or your parents have any unclaimed funds. State Unclaimed Property Database: To claim your lost property, you can simply run your name through the database provided by your state's unclaimed property agency. This can help you find and reclaim any funds held by the state. Contact the State Directly: Start your search with the state rather than the bank. Banks may not be cooperative if you are not the original owner of the account.

If you find your account in the state’s records, you will need to provide proof of ownership to reclaim the funds. This process can vary by state, but typically involves filling out a claim form and submitting necessary identification documents.

How Does the Escheatment Process Work?

The escheatment process refers to the transfer of unclaimed property to the government. Here is a typical outline of what happens to a dormant bank account:

Dormancy Period: An inactive bank account becomes dormant if there is no customer-initiated activity for a specific period, usually 3 to 5 years. This can trigger the escheatment process. Notification Attempt: Before turning over the account to the state, the bank will attempt to notify the account holder. If the account holder does not respond, the balance is transferred to the state. State Treasury: Once the account is sent to the state, the funds are held as unclaimed property. The state may use these funds for various public services. Reclaiming Your Funds: To reclaim your money, you will need to contact your state’s unclaimed property agency. You will be required to complete a claim form and provide necessary identification.

Conclusion

Remember, if you have a forgotten bank account with unclaimed funds, there is a process in place to help you retrieve those funds. Use the resources provided by your state to search for and reclaim your lost property.