Right now, there are state-run trust funds across the country that are sitting on billions of dollars in unclaimed property owed to individuals and businesses. This property comes from a variety of sources — legal settlements, tax rebates, bankruptcy claims, defunct bank accounts — but for one reason or another, that property never makes it where it is supposed to go, causing it to fall under the protection of the government.
Here is the critical point that most business owners do not understand: these state-run trust funds are not going to come to you to tell you they have your property. If you want to claim that unclaimed property, you will need someone who can recover it for you.
How Property Becomes Unclaimed
Unclaimed property laws — known as escheatment laws — require businesses and financial institutions to turn over property to the state when they cannot locate the owner after a period of dormancy. The dormancy period varies by state and property type, typically ranging from one to five years. Common types of unclaimed business property include:
- Uncashed checks: Vendor payments, refund checks, payroll checks, and dividend payments that were never cashed.
- Dormant bank accounts: Checking, savings, and money market accounts with no activity for the dormancy period.
- Stocks and securities: Shares of stock, bonds, and mutual fund holdings where the owner cannot be located.
- Insurance proceeds: Life insurance payouts, policy refunds, and annuity payments.
- Legal settlements and awards: Funds from class action settlements or court-awarded damages that were never claimed.
- Tax rebates and refunds: Overpayments of taxes that were returned but never deposited.
- Bankruptcy claims: Distributions from bankruptcy proceedings that were never collected.
- Assets lost in mergers and acquisitions: Accounts, checks, and other property that never transferred to the new owner when the company changed hands.
- Safe deposit box contents: The contents of safe deposit boxes where rental fees have lapsed.
Why Businesses Lose Track of Property
Businesses lose track of property for many reasons, most of which are entirely normal consequences of doing business over time:
Employee turnover is one of the most common causes. When the person who managed a particular account or relationship leaves the company, institutional knowledge goes with them. Uncashed checks sit in files, dormant accounts go unmonitored, and when the dormancy period expires, the property is escheated to the state without anyone realizing it.
Office closures and relocations frequently result in lost property. Physical documents are discarded, forwarding addresses are not updated, and mail is returned to sender. When the sender cannot locate the current address, the property eventually goes to the state.
Corporate name changes create a particularly insidious problem. The property is held under the old company name, and when the company rebrands or restructures, searches under the new name will not find it. This is why simply searching a state database under your current company name is insufficient.
Damaged or lost records can make it impossible to know what property the company should have received. Without records, there is no trigger to investigate whether a payment was received.
The Escheatment Process
When a business or financial institution holds property that belongs to someone else and cannot locate the owner, the law requires them to "escheat" — turn over — that property to the state. The state then holds it in trust until the rightful owner comes forward to claim it.
The process works like this:
- Dormancy period: The property sits with the holder (the bank, company, or institution) with no owner activity for the statutory period.
- Due diligence: The holder is typically required to make an effort to contact the owner — usually a letter to the last known address.
- Escheatment: If the owner cannot be located, the holder reports and remits the property to the state of the owner's last known address.
- State custody: The state holds the property indefinitely (in most cases) until the rightful owner claims it.
The Recovery Challenge
While states are required to hold unclaimed property for rightful owners, the process of actually recovering it is far from straightforward — particularly for businesses. The challenges include:
Identification. State databases are searchable, but they are not designed for complex corporate searches. If your company has ever changed its name, been acquired, merged with another entity, or operated under a DBA, assets may be listed under names you would not think to search.
Documentation. States require extensive proof of ownership before releasing property. For businesses, this means proving not just identity but the legal right to the specific property in question. When the property has crossed through multiple corporate entities, the documentation chain can be extraordinarily complex.
Multi-state complexity. Property is escheated to the state of the owner's last known address. A national company may have property in dozens of states, each with its own claim procedures, forms, and documentation requirements.
Bureaucratic delays. State unclaimed property offices process thousands of claims. Processing times vary widely, and claims are frequently delayed or incorrectly denied. Without legal representation to follow up and escalate, claims can languish indefinitely.
State reluctance. In theory, a state's unclaimed property trust only holds assets until the real owner comes forward to claim them. In practice, states are not eager to give up money or property that has fallen into their hands, since they can use it until the owner shows up to assert a claim. Getting them to hand it over can be a struggle. Asset recovery attorneys know how to wrest these unclaimed assets free and ensure they get where they belong.
How Poulson Law Recovers Unclaimed Property
The asset recovery lawyers at Poulson Law recently recovered a single asset worth $1.4 million which had been held by a state trust fund for 30 years. Our attorneys have decades of forensic experience in tracing title to unclaimed property from a variety of sources.
Our process begins with a comprehensive audit of your company's history — including name changes, mergers, acquisitions, relocations, and predecessor entities. We then conduct systematic searches across all relevant state databases, using our specialized technology and information sources to identify assets that a standard search would miss.
Once assets are identified, we handle the entire documentation and claim process on your behalf. We prepare and file all necessary documentation, follow up with state offices, and escalate claims that are being unreasonably delayed. Throughout the process, we maintain a library of documentation for each claim and provide regular status updates.
Who We Represent
Poulson Law represents debtors-in-possession and their successors and assigns in identifying and recovering assets that were abandoned or otherwise unclaimed by liquidating entities. While corporations and other organizations that liquidate their assets are supposed to take steps to ensure that property goes where it is supposed to, a combination of circumstance can lead to assets remaining unclaimed.
We also represent active businesses that have simply lost track of property over time — which, as we've explained, is the norm rather than the exception.
Frequently Asked Questions
Does unclaimed property expire? In most states, unclaimed property held by the state does not expire. The state holds it indefinitely for the rightful owner. However, some types of property — particularly certain types of securities — may be liquidated by the state and held as cash. The cash is still claimable, but the original asset form is lost.
Can I search for unclaimed property myself? Yes, you can search state databases. However, for businesses with complex corporate histories, self-searching rarely finds everything. Assets held under predecessor names, former subsidiaries, or assumed names will not surface in a simple search.
What if my company was acquired or merged? As a successor entity, you have the right to claim property held under predecessor names. However, you must prove the chain of succession with certified corporate documentation. This is one of our specialties.
How much could my company have? It varies enormously. Some companies find nothing; others recover six or seven figures. The only way to know is to conduct a thorough search. Given that the cost of not searching is the continued loss of your property, there is no downside to investigating.
Don't Wait to Recover What's Yours
With billions of unclaimed assets sitting in state funds, you potentially have a great deal to gain. The state is not going to come to you. If you are interested or believe you may have need of our services, please call our Cooperstown office at 607-547-1195. Let the unclaimed property attorneys at Poulson Law help you recover what is rightfully yours.
