Bank accounts that go unchanged over three years can be declared inactive, and the funds can be turned over to the state.
Your checking account can have so much activity it’s hard to keep track of it all, but it is possible to have bank accounts that see no activity over a long period of time.
Such inactive bank accounts can, at some point, become the property of the state, and the length of time in which a bank can declare an account inactive is different from state to state and from bank to bank.
According to the U.S. Department of Treasury Office of the Comptroller, state abandoned property programs require banks to turn over the funds of inactive bank accounts to the state treasurer. This practice is sometimes referred to as “escheating” an account, and generally, it occurs with an account for which there has been no customer-initiated activity or contact for a period of three to five years.
In most cases, states require banks to attempt to notify the account holder that the account is considered inactive and in danger of having its funds transferred to the state. This is usually done by letter and allows for a certain amount of time to active the account in order to take it out of the inactive file.
Activity can mean a deposit or withdrawal of as little as $5 depending again on state regulations. Also, there are states that do not require notification of account holder before moving the funds to the state.
Should funds from an inactive account be transferred to the state, the funds do not become the property of the state.
States are required to publish a list of unclaimed funds based on the information they have on the account owner. Publication usually takes place in major newspapers as well as on the state treasurer’s website. Should an account be discovered by the account holder in that manner, a process begins to recover the funds through claim forms that require proper identification.
But be warned: In 2013, Australia changed its banking laws to allow for inactive bank account funds to be transferred to the Australian Securities and Investment Commission to help with its current budget deficit and spending needs.
Kent McDill is a staff writer for Millionaire Corner. McDill spent 30 years as a sports writer, working for United Press International and the Daily Herald of Arlington Heights, Ill. From 1988-1999, he covered the Chicago Bulls for the Daily Herald, traveling with them every day through the nine-month season. He also covered the Bulls for UPI from 1985-88, and currently covers the team for www.nba.com. He has written two books on the Bulls, including the new title “100 Things Bulls Fans Should Know And Do Before They Die’, published by Triumph Books. In August 2013, his new book “100 Things Bears Fans Should Know And Do Before They Die” gets published.
In 2008, he resigned from the Herald and became a freelance writer. The Herald hired him to write business features and speeches for the Daily Herald Business Conferences and Awards presentations.
McDill also writes a monthly parenting column for the Herald’s Suburban Parent magazine.
McDill is the father of four children, and an active fan of soccer, Jimmy Buffett and all things Disney.