State of California is inundated with its growing pile of unclaimed funds with almost 11.6 million individuals still unaware of their unclaimed cash or property. In responseto this unmanageable situation, the state of California has enacted Unclaimed Property Law that requires property holders such as corporations, business associations, financial institutions and insurance companies to annually report and return dormant property to the State Controller’s Office. By a rough estimate, about $600 million are collected by the California state unclaimed funds division annually.
In a recent report by an NBC news affilitate in San Diego, a North Park woman was able to claim $200,000 of California unclaimed money. “It was shares of stock,” said Deborah Brueggeman and that she had apparently inherited them from an uncle who was now deceased. Other news regarding unclaimed funds in California was about the Oprah Winfrey show: In one of her episodes related to the unclaimed funds, Oprah managed to unite $70,000 with the rightful owners in the audience.
The unclaimed money vault in the state of California collects almost $300 million every month, which is approximately $5 billion annually. So, where does all this money go? The States General Fund of California is the beneficiary of all the unclaimed cash and the accrued interest. The accrued interest goes towards the development programs: California is one of the most naturally gifted states with a fantastic weather. This makes it’s a center of attraction for both inland and overseas workers.
The volume of immigrant workers in the state of California is also increasing at a rapid pace. One of the major economic hubs in the United States, California is also home to a large volume of unaccounted and missing money and property. The highly mobile workforce results in so many unclaimed funds and tax benefits, not to speak of the dormant bank accounts and other employment related funds. This trend is continuing unabated with no government mechanism to track the unclaimed funds of both domestic, foreign and immigrant workers. So, while the economy of California is booming, the pile of unclaimed funds is also swelling in the State treasury.
The unclaimed property law of California is a robust one which gives ample opportunity for the citizens to reclaim their lost funds, but the right level of awareness is still missing. This law also mandates that the holder of such unclaimed funds, such as corporations, business associations, financial institutions, and insurance companies to annually report and deliver property to the Controller’s Office after there has been no customer contact for three years.
One of the loopholes that has been pointed out in the Unclaimed Property laws is that the accrued interest goes to the state instead of the fund owner. This question was addressed raised in a bill, SB 1752, which would have provided greater powers to the state to search for the rightful owners of the unclaimed funds. This bill was also sought to separate the unclaimed money account from the General account, so that the interest accrued benefits the actual owner of the money.
So, functionaries like Steve Wesley, State Controller for California do try to change the system in favor of the citizens, but it’s an uphill battle for sure.