A former Maine state treasurer and vice president of Avenu’s Finance & Revenue division, David Lemoine is someone that everyone wants to know. He facilitates receipt and distribution of unclaimed property by state governments, which runs into the billions of dollars. Here he discusses that part of a state government’s mission, how Avenu’s private sector expertise is a necessary part of fulfilling that, and what to expect from a future with more unclaimed property.
How does Avenu support states with unclaimed property?
We help states facilitate unclaimed property compliance and perform all related administrative tasks. We help them collect assets including forgotten bank accounts and safe deposit contents, stocks, bonds, uncashed checks and wages, insurance policies and escrow accounts, to name a few. We also help private companies comply with state mandates for reporting unclaimed property, which is critical because each state has complex sets of laws that about yearly filings. Then ultimately, we help states find and reunite rightful owners with their lost assets.
How much unclaimed property is there?
Overall there are billions of dollars in unclaimed property held by states. Our securities custody team alone manages $3.1 billion in assets for 28 state administrators, and this year we delivered nearly $600 million in assets escheated (returned) to the states. Another way of looking at it is that right now we host the website missingmoney.com with a database of 124 million unclaimed assets held by 43 states, and each year we process 124,000 rightful owner claims through our software. Our experts also review and evaluate 80,000 claims annually.
What are the biggest challenges in dealing with unclaimed property?
In this line of work it is the accurate transfer, custody and tracking of massive amounts of personal data. These records are constantly being accessed and updated, and the states are legally and publicly accountable for the performance of these tasks. That’s what unclaimed property is – thousands and thousands of records of people who have lost track of their own assets.
How does the public benefit from unclaimed property programs?
First, the escheatment of unclaimed property into centralized state databases gives rightful owners a reasonable way to look for lost property. Otherwise they would have to call every bank, business, employer or retailer in their past to see if they held anything!
Second, the tools we provide make these state-held properties visible to rightful owners so that they can be found and reclaimed.
Third, most states use funds that are not reclaimed to provide other public benefits. During my time as state treasurer for Maine we worked hard to find rightful owners, and the legislature could use any remaining money for general fund purposes. Of course, we retained the liability in perpetuity and paid rightful owners whenever they came forward. Some states put these funds toward education or other uses; it just depends on the state.
Why would a state want Avenu’s assistance in dealing with unclaimed property?
The statutes governing unclaimed property are complex and differ state by state. Each state’s unclaimed property administrator must enforce relevant statutes, including unique dormancy periods, different property codes for each kind of property, and records management for perpetuity. This is a complex undertaking that requires multiple levels of expertise.
In addition, the volume to be processed quickly becomes unmanageable without the right support. At Avenu, the continuous improvement we practice keeps us at the forefront of changes in law or technology. We know the ins and outs of each state’s regulations so we can make sure our clients get their job done right.
Describe the processes for distribution of claims payments.
As the facilitator of unclaimed property distribution, Avenu’s tools allow states to maintain the data about assets. When claims come in, we verify that the claimant is the rightful owner using screens and protocols established by each state. We then test the claimant’s information for accuracy and completeness, and grade the results for state action, including the return of lost assets to rightful owners. Straightforward claims can be handled in minutes and paid within days.
How do private holders of unclaimed property benefit from Avenu’s involvement?
The private holders of unclaimed property benefit through compliance with state law and the mandate to use due diligence in finding rightful owners. When property gets returned through the process, they then clear their books of liabilities that otherwise accumulate and complicate good accounting. Prior to that outcome we help holders through due diligence searches and a range of holder-reporting or compliance services. We can do this because we know each state’s unique rules, reporting and dormancy periods, and how they apply to different property types. That is where we also help corporations, all of which must comply with state regulations and often have more than one type of property in multiple states.
How do individuals or corporations know if they have assets to claim?
They can search on MissingMoney.com, our site with the only multi-state unclaimed property search engine endorsed by the National Association of Unclaimed Property Administrators. States post their data on the site without charge, and rightful owners conduct free searches. There are links to state sites where users can submit a claim.
What does the future hold for this business?
Even though unclaimed property administration has been part of state governments for decades, there is always change on the horizon. State regulations change, technology will continue to simplify the processes, and new types of properties will come into existence, be acquired and lost, and become subject to escheatment to the states. In years past we have seen sporadic spikes in the volume of unclaimed property, and when that happens it places more demands on states.
Last, but not least, the success of state unclaimed property programs may lead to broad adoption across the globe as more and more companies have multi-national footprints and foreign jurisdictions learn about and seek to replicate the public and private benefits that are enjoyed here in the U.S.