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The Rules of Escheat (the very opposite of cheat)

Dec 4, 2021 | Personal Finance

It’s never a bad idea to check with your state to see if there is any unclaimed property being held that belongs to you.  The last time I checked there was $72 waiting for me, an uncashed check from Blue Cross.  How did that check become unclaimed property and how do I go about claiming it?

You don’t need to hire anyone to search for unclaimed property.  In New Jersey all you have to do is go to this site, (New Jersey Unclaimed Property – Official State Website – claim search), and enter your name or your business’ name, click search, and if there is property in your name, you’ll see your name and an associated address and be given the opportunity to claim it.  You can initiate the claim process right on the website.  It basically involves submitting evidence of your identity. If you think there should be funds being held for you that were not located in your initial search, you can request a manual search by contacting the Unclaimed Property Administration at PO Box 214, Trenton NJ 08625-0214.

Funds that are held as unclaimed property in New Jersey don’t belong to the State; they are being held for the rightful owners.  However, nationwide only about 1/3 of escheated funds eventually are reclaimed.  The balance is used to balance state budgets. At a recent seminar, we learned that 2022 is expected to be an aggressive year for compliance audits for businesses holding unclaimed property.

Escheatment is the process of a financial institution or company handing over unclaimed property.  That property can include gift cards, uncashed payroll checks, dormant bank accounts, or even escrow funds and small retirement accounts.  Rental deposits and the contents of safe deposit boxes also fall under this statute.  On the horizon are rules for virtual currency and internet gambling.  Each state has its own regulations about what funds need to be escheated and when.  Businesses are required to keep records of unclaimed property and to regularly report unclaimed property to New Jersey electronically on the website at  unclaimedfunds.nj.gov/app/submit-a-report.  Property associated with a business transaction is usually assumed to be abandoned when it has gone unclaimed for three years with some exceptions.  The full statute on Unclaimed Property in New Jersey can be found on this document (PDF).

As an individual I do enjoy an annual check to see if there is any unclaimed property in my name.  Businesses though should be mindful of their obligation to turn over those uncashed checks, etc. to the State so that the proper owners, people like you and me, have an opportunity to collect funds that are rightfully theirs.  If you need assistance evaluating your compliance with New Jersey unclaimed property statues, we are here to help.

Article Submitted by – Marlana Richardson

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