How to recover unclaimed inheritance money

When a loved one dies, the heirs may be unaware that there are forgotten funds sitting out there in the deceased's name.

If family members don't make an effort to claim this money, an unclaimed property becomes the property of the state, which can be a tragic loss if someone in the family really needed the cash.

If you suspect that there may be unclaimed money from deceased relatives, you may want to do a search to find it. A search for unclaimed money may involve a bit of detective work, but the financial payoff can be worth it.

Unclaimed assets

Potential unclaimed assets include bank accounts, bonds, certificates of deposit, dividend or payroll checks, life insurance policies, retirement accounts, safe deposit box contents, stocks, and securities and utility deposits that are held by financial institutions or holding companies. The assets are considered abandoned or dormant if there has been no activity in the account for a period of time, commonly a year or more.

The holder of the property is required by law to contact the owner, yet often makes very little effort to do so. In cases where the owner has died, the holder may be unable to locate the heirs either because of an unreported address change or a name change after a marriage or divorce.

When the heirs fail to claim the property within a specified period of time (the dormancy period) it passes to the state's unclaimed property division, a process known as escheat.

Searching for unclaimed money

It's easy for individuals to search for unclaimed funds, thanks to online databases. 

The best place to begin your search is www.Unclaimed.org, the website of the National Association of Unclaimed Property Administrators (NAUPA). This free website contains information about unclaimed property held by each state. You can search every state where your loved one lived or worked to see if anything shows up. It may be a good idea to search all 50 states and the District of Columbia.

You may find yourself directed to www.MissingMoney.com, where you can do a multi-state search. Also endorsed by NAUPA, this site lets you search for unclaimed property in participating states (which do not include CA, CT, DE, GA, HI, IL, OR, PA, WA, WY).

Don't forget to click on the Links tab and search under Related Links. Here you'll find links to the Financial Management Service, U.S. Savings Bonds, the IRS, the Pension Benefit Guaranty Corporation, Housing and Urban Development, Federal Deposit Insurance Corporation, and Department of Veterans Affairs, which will point you to additional searchable databases.

If you want to do a thorough search, don't just search by one form of your loved one's name. Many state databases require you to enter the name exactly the way it is in the system.

Try different spelling variations, add a prefix or suffix, search under the maiden name, or try using the first initial and last name. You might even want to try adding words like “Beneficiary," “The Estate of," “Payable on Death," “Unknown Heir," or “No Beneficiary."

Using a locator service

There are services that offer to search for unclaimed inheritance money for you for a fee. Unless you have reason to suspect that there is a significant sum of unclaimed money out there or your loved one lived abroad, it makes more sense to conduct the search yourself.

NAUPA notes on its website that most abandoned accounts have very little money in them. If you do locate funds that belong to you, the state will walk you through the process of how to claim them. As a rule, all that is required is your Social Security number and proof that you are the rightful heir.