Here’s how to claim your property from the State of California
When employees forget to cash their checks, or bank accounts go untouched for years, California businesses are supposed to let the state know.
But because so few comply with a state law to report the “forgotten funds,” there’s an estimated $24 billion in unclaimed property sprinkled across the state that the controller’s office is trying to put back in Californians’ pockets.
The California Unclaimed Property Law requires insurance companies, multinational corporations, banks, real estate agencies and other businesses to transfer unclaimed funds to the state controller, usually after three years of inactivity.
In addition to uncashed checks and dormant bank accounts, the money is hiding in stocks, bonds and insurance benefits.
But only 2 percent of holders — 16,555 businesses — submitted an unclaimed asset report in 2016, meaning nearly a million businesses are still out of compliance, according to a new report by the state Legislative Analyst.
The state already holds $9.3 billion that California residents could claim today, and the controller’s office estimates it would collect another $14.7 billion if businesses accurately reported the property.
“Unfortunately, when business compliance with the law is so disappointingly low, that means only a fraction of unclaimed property is transferred to the state government, the only one-stop clearinghouse (where) rightful owners may ever find it,” said Taryn Kinney, press secretary for California State Controller Betty T. Yee.
The state benefits, too, when the money is reported. California is indefinitely liable to return the money to owners, but uses an estimated $400 million per year to pay for other programs through the General Fund in the meantime.
In some cases, holders are unaware of the law. Others intentionally do not report unclaimed cash because they are charged annual interest of 12 percent on the funds.
And sometimes it’s challenging to notify owners, considering many have died, relocated or are just difficult to track. Proving rightful ownership of property is also a beast in itself. Owners have to provide proof of residence, relation and employment, bank statements and utility bills, to name a few.
The analyst’s report recommended the Legislature pass a one-time amnesty to let businesses avoid interest charges, as well as include a question on tax filing forms that asks if businesses have submitted a holder notice report.
“(The state) is like a temporary holder of the money on people’s behalf because a business can go out of business, or it might be hard to know your grandmother had an uncashed check,” said Ann Hollingshead, senior fiscal and policy analyst and author of the LAO report. “The state is essentially stewarding this money.”