Unclaimed money refers to any amount $20 and more than that, counting share dividends, rent and bonds, salaries and wages, debentures and interest income from a sale. Here is an insight into the concept of unclaimed money.
Unclaimed Money refers to your funds that are vested in the intangible assets such as cash, stocks, or bonds that are in possession of some organization or any other entity. An asset is declared as unclaimed when the owner neglects his assets or breaks off all his contacts with the company or institution concerned.
Unclaimed Money is categorized under following categories:
- The sum of money that is payable to the owner under the law and have remained unpaid for a term of one year or more than that after becoming payable. For example, Profits and dividends that are declared for distribution, matured fixed deposits, Insurance claims which have been approved for payment, tender deposits for which the intended purposes have been accomplished. It also includes the commissions, salaries, bonuses, wages, and other payments that are due to employees.
- The credit balance of the account that has no activity by the owner of that account for a time span of seven years or more. For Example, Current accounts, Saving accounts, and the Fixed deposits having automatic instructions of removal.
- The credit balance of the trade account that has remained inactive for a term of two years or more.
The main factors that cause such money to go in the hands of Registrar of Unclaimed Moneys are:
Changing the address without informing your business contacts.
- Forgetting about small bank deposits
- When an owner dies and his or her, legal heirs are unaware of the money.
- When a low balance account is not closed down instead, it is left behind as it is.
- Change in the name of banks as a result of mergers and closing of a branch and the owner has no idea about which bank holds his or her account.
- When the owner has an inadequate financial understanding.
What Happens When Unclaimed Money is not recovered?
If the lost funds are not claimed within an applicable time span, then the government will absorb those funds into centralized government revenue. If that happens, then the money does not belong to you anymore, and thus, you will not be able to claim it. This means that if you do nothing to recover your funds, then you will lose all your unclaimed money.
Does the State just go in and obtains the money?
No, the state cannot just come in and take the money. There is a law primed to guard your property. It necessitates the holder of the asset to give account for them and convey them to the Treasury. A potential holder can be any business organization having possession of the property. It comprises of banks, nonprofit organizations, insurance companies, utilities, government agencies, etc.
Unclaimed property is forwarded to the State only in following two situations:
- When there is not any activity in the account for the specified dormancy period.
- The holder has made attempts on his or her part to make contact with the owner at the previously known address.
If these are ineffective, then the funds pass on to the State.