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Unclaimed Money From Deceased Relatives
Unclaimed money is money that no heir or beneficiary has claimed and that the holder has turned over to the state. You may be entitled to unclaimed money or an unclaimed inheritance from a deceased relative without knowing it. People are not always organized about their finances; a relative may have bought an insurance policy or an annuity and forgotten about it. An executor or administrator may have neglected to search for unclaimed funds, or may have searched at a time when the money had not yet reached New York State’s Office of Unclaimed Funds.
How money becomes unclaimed
Every company is required to turn over unclaimed assets to the state. These assets take many forms: bank accounts, life insurance policies, certificates of deposit, savings bonds, dividend and payroll checks, IRA accounts, 401(k) plans, the contents of safe deposit boxes, securities, pension benefits and uncashed checks.
The paths are familiar. An owner opens an account and forgets it, and the bank loses contact when the owner moves, dies or simply stops checking. An insured buys a life insurance policy and never tells the family. A former employee never claims an old pension, often because of a move or lost paperwork. A shareholder moves without updating an address and dividends pile up uncashed. Tax refunds, insurance refunds and utility deposits go to outdated addresses. Safe deposit box fees go unpaid until the contents are turned over. Class action settlements and judgments go uncollected. After a holding period without contact, typically two to five years depending on the asset, the holder must remit the funds to the state under the abandoned property (“escheat”) laws.
This timing matters for estates. An executor or administrator may have been appointed, but if the deceased kept no record of the asset, the fiduciary will not know it exists. Even a fiduciary who checked the unclaimed funds database would not have found it, because the money is turned over only after the dormancy period runs. If you are an heir, it pays to keep checking the databases in the years after a death.
Holding periods under New York’s Abandoned Property Law
New York’s Abandoned Property Law sets the period after which property must be reported and remitted to the State Comptroller’s Office of Unclaimed Funds. The general rule is five years for most categories, but some categories are shorter or longer.
| Type of property | Holding period |
|---|---|
| Wages and payroll | One year |
| Life insurance proceeds | Three years from when the proceeds became payable |
| Bank accounts | Five years from last contact |
| Brokerage accounts | Five years from last contact |
| Money orders | Seven years |
| Travelers checks | Fifteen years |
During the holding period the holder may try to contact the owner. If those efforts fail, the funds go to the state when the period expires.
The state holds the money; it does not keep it
The state holds unclaimed funds indefinitely on behalf of the rightful owner or the owner’s heirs. The funds do not become state property. The state earns income from investing them but does not consume the principal, and there is no deadline for claiming. A claim filed today for funds remitted decades ago is still valid if the claimant can prove entitlement. New York holds billions of dollars this way, so it is worth entering the names of deceased relatives to make sure you are not missing a windfall.
Where to search
Three databases cover most New York claims. The New York State Comptroller’s Office of Unclaimed Funds is at https://ouf.osc.state.ny.us/ouf. The Department of Financial Services runs a lost life insurance policy finder at https://myportal.dfs.ny.gov/web/guest-applications/lost-policy-finder. For unclaimed IRAs and property held by other states, search by state at https://unclaimed.org/search/.
Different assets end up in different places, so a thorough search also checks the federal sources.
| Federal source | What it holds |
|---|---|
| Treasury Direct and Treasury Hunt | Matured savings bonds that have not been cashed |
| FDIC | Balances of accounts at failed banks not claimed by depositors |
| NCUA | Balances of accounts at failed credit unions |
| HUD | Refunds on FHA-insured mortgages |
| IRS | Refund checks that could not be delivered |
| PBGC | Unclaimed benefits from terminated pension plans |
| Department of Veterans Affairs | Unclaimed life insurance for veterans |
Search tips
Search by last name and the first initial of the first name. That narrows the results but stays broad enough to catch a misspelled first name. If your relative had two first names, two last names or a hyphenated name, try the names together with a hyphen (Smith-Washington), with a space (Smith Washington) and with no space (SmithWashington). Try nicknames. If the name was frequently misspelled, search the misspelling too.
How to claim the money
In New York, unclaimed money belonging to a deceased person must generally be claimed by the executor or administrator, and claims over $1,000 typically require letters testamentary or letters of administration even where a small estate affidavit might do for a smaller amount. If you are the designated beneficiary of the asset, you can claim it without anyone being appointed as the estate’s representative.
The state will tell you the procedure for your claim. The documents it asks for depend on the claim, but the usual set is below.
| Document | What it shows |
|---|---|
| Government-issued ID | The claimant’s identity |
| Death certificate (from the Department of Health) and birth certificate | The deceased’s identity and death |
| Proof of relationship | The connection between the deceased and the claimant |
| Letters testamentary or letters of administration dated within the last six months, or a small estate affidavit and table of heirs for estates under $50,000 | The claimant’s authority to act for the estate |
| Utility bills, tax returns or voter records | The connection between the owner and a known address |
| Bank statements, insurance policies, stock certificates | Ownership of the specific asset |
Larger claims may call for more.
What these claims look like in practice
A family member discovers that a deceased aunt had a bank account nobody knew about, and the funds have already gone to the state. The family member establishes the right to inherit, usually through probate or administration, and then claims the funds. A life insurance policy is never cashed and the proceeds are remitted to the state; the beneficiary or the estate claims them with the documents above. A deceased shareholder’s dividends go unclaimed; the estate claims the dividends and potentially the underlying shares. A safe deposit box goes unpaid and its contents are turned over; the estate claims the contents.
“Asset recovery” services
Some companies offer to find and recover unclaimed assets for a percentage of what is recovered. Some are legitimate, but many take a large cut for work a family can do for free. Search the free databases yourself first. If you still consider hiring a service, understand exactly what it will do and what it will charge, confirm that the company is real and not just mailing solicitations based on public records, and recognize that a fee of 30 to 50 percent is excessive for what is essentially a data lookup. An attorney’s flat or hourly fee is often the more economical route when the claim requires letters from the Surrogate’s Court.
Tax consequences of recovered funds
Recovered funds may be taxable to the recipient if they would have been taxable to the original owner. Insurance proceeds generally keep their tax-free character. Bank account funds may include taxable accrued interest. Inherited assets may receive a step-up in basis. Estate tax can apply if the recovered amount, added to the rest of the estate, exceeds the applicable threshold. When the amount is significant, a tax advisor should review the reporting.
If you have found an unclaimed asset in a relative’s name and need letters from the Surrogate’s Court to claim it, we can handle the appointment and the claim. Call us at 212-233-1233 or email [email protected].
About the Author
Albert Goodwin Esq. is a licensed New York attorney with over 18 years of courtroom experience. His extensive knowledge and experience make him well-qualified to write authoritative articles on a wide range of legal topics. He can be reached at 212-233-1233 or [email protected].
