retend that you own an insurance company. Let’s say that one of your customers with a life insurance policy
dies, and the beneficiary named on the policy is also deceased. There was no will, and no known family or next-of-kin.
Does your insurance company get to keep the policy’s death benefit? If not, what should be done with it? Is anyone else entitled to this money? If so, who? What does your company need to do about it? These are the kinds of issues addressed by unclaimed property laws!
Unclaimed property laws vary from state to state, and different laws benefit different groups. In this article, we’ll discuss the laws that govern unclaimed property.
What are unclaimed property laws?
Most states have some form of unclaimed property law, which generally provides for the escheat (i.e., forfeiture to the state) of property after a certain period of inactivity by the owner. The type of property covered and the dormancy period vary by state, but may include items such as bank accounts, uncashed checks, and unredeemed gift certificates.
The Uniform Unclaimed Property Act (UUPA), which has been adopted in some form by most states, provides that property is presumed abandoned if it has remained unclaimed by the owner for a period of time specified by state law – typically three to five years.
Once property is deemed abandoned, the holder must attempt to locate the owner using standard methods such as certified mail. The law typically dictates that if a business such as a bank or insurance company is holding onto someone’s property, and the owner can’t be located after a certain period of time, the property must be turned over to the state.
For this reason, businesses are required by law to report abandoned property to the state. Once the state takes custody of the property, they try to find the owner according to the methods dictated by law.
Why do unclaimed property laws exist?
The purpose of unclaimed property laws is to protect the rightful owner of the property, as the laws are designed to ensure that reasonable attempts are made to return lost, forgotten, and abandoned property to the owner.
In effect, unclaimed property laws help prevent fraud and theft by making sure that the person or business that discovers abandoned property doesn’t simply keep it for themselves rather than trying to find the owner. By requiring businesses to report unclaimed property and turn it over to the state, the law is helping make sure that people don’t lose their property simply because the business can’t make contact with them.
By law, if someone dies without a will or family, their property is turned over to the state. The state then tries to find the rightful owner of the property and return it to them. If the owner can’t be found, the state keeps the property.
Additionally, it’s important to note that unclaimed property laws also help fund state governments. Depending on the law, after a certain period of time has passed after the state has taken custody of unclaimed property, they may sell it or use it to fund state programs. The usage of these funds is governed by law, which helps to ensure that the property is not wasted, but that it is used in a way that benefits the public.
How do unclaimed property laws protect the people?
Unclaimed property laws effectively protect people’s property rights. Because of unclaimed property laws, businesses are forced to take extra care in holding onto someone’s property and to make an effort to find the owner if their location is unknown and they’re unable to be contacted.
By requiring that abandoned or unclaimed property be turned over to the state, these laws help make sure that people don’t lose their rightful property just because they can’t be located. The law also sets time limits for how long the property can be held before it must be reported, and for how long someone has to claim their property.
Thanks to unclaimed property laws, you can be sure that your rights will be protected if you ever lose or abandon your property. These laws are designed to help people keep their rightful property, but they can only do so if the rightful owner takes action!
If you have any property that you think might be at risk of being turned over to the state permanently, or if you think you may have lost property, it’s important to take steps to protect your rights. You should go to the correct website for your state, search for it, and claim your unclaimed property as soon as possible.