401(k)s


Where to Find Free Money

Last fall, Michelle Bixler received a letter from the state of Pennsylvania saying it had a $35,000 check for her from an insurance company. She thought it was a scam. It had been nearly nine years since an on-the-job injury left her unable to work. The insurer that was processing her worker’s-compensation claim had gone belly up, so she assumed she’d never collect anything.

Before her accident, Bixler had worked for a Philadelphia tour company driving a horse-drawn carriage. One day, her horse reared and took off. She injured her back and had to undergo two surgeries. Afterward, her only source of income was meager disability benefits, forcing her to move in with friends. She learned, as she puts it, “to stretch each nickel to a dollar.”

In the meantime, the state picked up Bixler’s claim and was searching for her. After calling the state to verify the authenticity of the letter, Bixler, 52, filled out the attached form, got it notarized and sent it back. She still can’t quite believe her good fortune. “I must have a karma credit somewhere,” she says.

According to the National Association of Unclaimed Property Administrators (NAUPA), some $32.9 billion in unclaimed assets is sitting in state treasuries and other agencies just waiting to be claimed, and the figure is rising every year.

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Unclaimed assets -- accounts that have been inactive for at least a year -- can include checking and savings, payroll checks, utility deposits and tax refunds. They may also include stock certificates, certificates of deposit, insurance benefits, pension payments and safe-deposit-box contents.

How do assets get lost in the first place? For some people, like Bixler, it may simply be a matter of moving to a new address without alerting all the right financial institutions. Or if a bank or investment account lies dormant and the financial institution determines it can’t find you -- after a set period that varies by state -- the institution is required to turn over the assets to the state.

Be wary of offers to help you find hidden money. Some bounty hunters are legitimate, but it’s not worth paying a finder’s fee of as much as 50% -- particularly if the amount you’re looking for is small -- to locate something you could track down on your own for free. “You shouldn’t be paying for this,” says Shane Osborn, the treasurer of Nebraska and president of the NAUPA. And if you get an offer to help you find assets for an upfront fee, it’s probably a scam (see "Phishing for Treasure," below).

Where to start. Whether you’re just curious or you suspect that you or someone in your family has missing assets, there’s a wealth of sites to launch your own treasure hunt. The best place to start is Missingmoney, a NAUPA-endorsed Web site that hosts searchable databases for nearly every state. If your state isn’t listed, go to NAUPA’s own Web site, where you’ll find a link to all state treasuries.

To improve your chances of finding lost assets, use several variations to search for your name -- say, last name; first initial and last name; and full name. If you have a commonly misspelled name, run the misspelled version through the database, too. An improper spelling may be the reason your assets were lost in the first place. If you’ve lived or worked in a number of different states, check each one. You should also look up the names of deceased relatives. Perhaps your Aunt Shirley had a savings account or pension payout she forgot to mention in her will. If you find something, you’ll need to fill out paperwork to claim it and provide government-issued identification to prove your identity. Once you’ve submitted the proper paperwork, you should receive your property within a few weeks.

Beyond state treasuries, the Internal Revenue Service is a treasure trove of lost loot. At the end of 2009, the IRS had more than $120 million in unclaimed refund checks -- mainly those returned after they were sent to a wrong address. The average undeliverable check was $1,148, and some taxpayers were due multiple refund checks.

If you didn’t get yours, go to the IRS and find the Where’s My Refund? page. You’ll need to enter your Social Security number, your filing status and the amount you were supposed to receive (as shown on your tax return). Or call the agency’s toll-free refund hotline (800-829-1954) and update your address. Then sign up for direct deposit when you file your next return. Even if you don’t file your tax return electronically, you can have your refund deposited directly into your bank account, or even into your IRA.

Other places to look. Another resource to find a lost stash is the insurance industry. Over the past decade, some major insurers have converted from mutual life insurance companies, owned by their policyholders, into publicly traded firms, owned by shareholders. In this process of demutualization the firms give their policyholders shares of stock or cash. The size of the payout depends on the face value of the policy, the length of time the policy has been in force, and the total amount of premiums paid.

As insurers made conversions, many of them couldn’t find policyowners. Prudential, for instance, couldn’t locate more than a million of its policyholders when it demutualized in late 2001. If you suspect that you or family members might be affected, go to the Demutualization Claims Clearinghouse.

Another common missing asset, old stock certificates, may be harder to track down. If you have the CUSIP number -- an identification number used for stocks and bonds -- call your broker and find out the value of the security. If you don’t have the CUSIP number but know the name of the company, try the investor-relations department of the firm and ask the registrar to help you.

If that doesn’t work, you could hire stock-certificate specialist OldCompany.com, which charges $39.95 per report. “Never assume an old certificate is worthless,” says Barry Pulchin, who specializes in investigative and forensic accounting at Metis Group, an accounting firm in New York. “It could be very valuable.”

To prevent your assets from falling into the hands of the state in the first place, follow a few key steps. As obvious as it sounds, when you move, notify every financial institution that holds your money or property of your new address. Ditto if you change your name because of marriage or divorce. Don’t forget to notify former employers that may owe you a pension. Simply alerting the post office of your new locale won’t suffice because its forwarding service lasts only a year. Plus, some financial papers can’t be forwarded.

Keep track of all of your bank accounts, insurance policies, stock and bond certificates, and utility and rent deposits. Cash checks for dividends and insurance settlements as soon as you can so that they don’t get misplaced. Finally, prepare for the worst. If you have a safe-deposit box or home safe, give a family member or friend a key. And be sure to write a will that specifies who gets your assets.

Phishing for treasure

There are legitimate property locators who can help you find your assets, but there are plenty of scammers out there, too. Be wary if you receive a letter saying you have to pay an upfront fee in order to get your unclaimed property. That’s a sure sign of a scam. “These thieves feed off the uninformed,” warns Chase Adams, a lawyer in Fort Lauderdale, Fla. If you receive a letter that looks as if it’s from your state’s department of unclaimed assets, call the state to check it out.

If you get an e-mail that appears to be from a state treasurer saying you have unclaimed property, it may be a “phishing” expedition. Missouri’s state treasurer recently warned consumers about a fraudulent e-mail that informed recipients they might have unclaimed assets -- and asked them for personal information. Responding to the e-mail could make you vulnerable to identity theft. If you’ve received such an e-mail, report it to the Federal Trade Commission.

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