A few weeks ago, I had a typical daydream when I discovered that my fiancé had a stock custodial account that I didn’t know about. “What if I had money too? In fact, what if I was rich and didn’t even know it?”
At least anyone who spent the summer before eighth grade reading Great Expectations has thought about this at least once. And while we can pretty much rule out the possibility of an anonymous supporter waiting in the wings, it’s not that far-fetched that we forget the Ermey family is waiting for us or lose our money.
According to the National Association of Unclaimed Property Administrators, Americans in 2023 had about $70 billion worth of unclaimed property, including uncashed paychecks, forgotten rebates, inactive brokerage accounts, life insurance proceeds, and more. In the fiscal year that ended last June alone, states returned more than $4 billion worth of property to owners, according to the NAUPA report.
Who’s to say some of it can’t be mine? Or is it yours?
It will probably take some research to find out. “Make sure you have a plan in place just in case,” says Megan McCoy, a financial therapist and professor at Kansas State University. Otherwise, you may be tempted to spend your money for purposes other than achieving your financial goals.
“Windfalls can disrupt our mental accounting,” she says. “We don’t treat that money the same way.”
How to find money that’s already yours
Of course, you have to find the money first before you can worry about exploitation.
If you know specifically what kind of money is sitting around you, you may need to go through a special process to find and claim it. For example, if you suspect you’ve lost your private sector pension benefits, you might want to start your search with the Pension Benefit Guaranty Corporation. The Retirement Guarantee Corporation holds unclaimed benefits for employees who were not paid when their retirement plans were terminated.
For more general searches, check out MissingMoney.com. MissingMoney.com is a NAUPA accredited site that serves as an unclaimed property clearinghouse with participation in nearly every state. You can search for your name or business name across the country or in states where you’ve lived or done business.
“This is a great resource, especially for people who are on the go,” said Kathryn Sheets, director of communications for the National Treasury Association. “It’s easier to search in one place and find everything at once.”
A search for my name reveals a mix of various Ermey assets, including grandparents, uncles, aunts, and perhaps myself. The assets I found in my name, some old cash back rewards, and the cashier’s check are worth $188 as far as I know. These are all companies I’ve done business with, but they were listed in states I’ve never lived in.
That’s not unusual, Sheets says. “The main rule is that unclaimed property goes to the state of the owner’s last known address, but if for some reason the address is unknown, it goes to the state where the business was established,” she says.
Sheets points out that the rules for claiming real estate are not exactly the same in every state, and the rules can also vary depending on the type of property. For example, the rules for claiming a small stock dividend may be different than for claiming a large cash settlement or a deceased relative’s safe deposit box.
When you make a claim through MissingMoney, the applicable state will contact you with the rules and instructions for claiming your property. You must provide documentation proving that you are the rightful owner of the property, no matter what is missing.
“If you think you’ve found unclaimed property that’s yours, it’s just a matter of working very diligently with the state and having some patience in working with the government to verify the identity,” Sheets said. “And you end up getting the money you left behind.”
Avoid these psychological traps with “found” money
Ideally, you’ll use your “found” money like you would any remaining funds, with at least some of it going toward financial goals like building an emergency fund, investing for retirement, or paying off debt.
“Psychologically speaking, we know that we tend to treat it differently,” McCoy says.
When people receive money they didn’t think they had, she says, one of two cognitive biases that can prevent people from using their money productively tends to kick in.
fuzzy mental accounting
Most money is fungible. A dollar from one account does the same thing as a dollar from another account. But an unexpected influx of cash can create “non-fungibility,” the sense that the money you earn should be used to pay bills or fund your retirement, but the money you “found” should be used to enjoy or treat yourself, McCoy said.
“We want people to use their income tax refunds for their economic futures, and they often end up being spent on TV,” she says.
Account as symbol
At the other end of the spectrum, some people who discover missing accounts experience a phenomenon known as the “endowment effect,” where they are reluctant to spend or move the money because of their perceived symbolic importance.
For example, someone who receives life insurance proceeds may worry that whatever they’re buying with the money is too frivolous or too disrespectful to the deceased, McCoy says.
Or let’s say you inherited a pile of stocks from your grandparents, all invested in one blue-chip company. Some financial planners recommend selling positions slowly in order to choose a more diversified portfolio. Instead, you might hold on to stocks “because your grandpa bought them,” McCoy says.
There’s nothing inherently good or bad about spending money, McCoy says. But when you get a previously unknown amount of money, she says, it’s good to ask yourself how you’ll use that money to maximize your financial health and well-being.
And if you’re worried about falling into the mental accounting trap, McCoy says you can name the account that helps you reach your money goals now, like “retirement account,” “wedding fund,” or “vacation fund.” That way, she says, the landing spot for any money you manage to find will be pre-selected.
“Mental accounting can also be a good thing,” she says. “We can use it to help ourselves instead of hurting ourselves.
Do you want to get ahead at work? Next, you need to learn how to make effective small talk. In CNBC’s new online course, “How to Talk to People at Work,” expert instructors share practical strategies to help you use everyday conversations to gain visibility, build meaningful relationships, and accelerate career growth. Sign up now!
