This article describes one state treasurers approach to developing a new statewide abandoned property program.
Located beneath the state capitol grounds in Frankfort, Kentucky is a vault containing a Kentucky treasure. That treasure is Kentucky's unclaimed property fund. Unclaimed property involves property or financial assets--such as abandoned savings and checking accounts, uncashed checks, and travelers' checks--turned over to the state after a period of time, usually seven years.
The property can be turned over to the state for a variety of reasons. For example, if a family member allows payments to lapse on a safety deposit box, the bank holds the property for several years and then turns it over to the state to act as guardian for its contents. The state then attempts to return the property to its rightful owner. In most cases, the owner has forgotten that the property or account exists. Or, often an owner has died and the heirs don't know about the property--rare coins, fine jewelry, and, yes, some cash. Those are just some of the items the Kentucky State Treasury Department--through the Unclaimed Property Division--tries to return to its rightful owners every year.
Programs like the Kentucky State Treasury's Unclaimed Property program are not few and far between. Almost every state has some type of similar program that administers abandoned property and seeks out the rightful owners of these assets. All take different approaches, and some work better than others, but the changes made in the Kentucky State Treasury's Unclaimed Property program have made it one of the best in the country.
Since taking office in January of 2000, Kentucky State Treasurer Jonathan Miller has gone to great lengths to uproot the familiar notion in Kentucky of taking a passive approach to giving back unclaimed property. With numerous changes to Kentucky's Unclaimed Property program, the Treasurer's office has taken an aggressive, pro-active approach to seeking out the rightful owners of abandoned property. With the results they are seeing, their changes could prove to he helpful pointers for all other abandoned property programs across the country. This article describes the history of Kentucky's Unclaimed Property Fund, frequently asked questions regarding this program, and outlines the major renovations made to the Kentucky State Treasury's Unclaimed Property program over the past few years.
History of Kentucky's Unclaimed Property Fund
Since the start of Kentucky's Unclaimed Property program in 1942, more than $97 million has been collected. Of that, more than $15 million has been returned to owners. The Commonwealth of Kentucky currently holds more than $40 million worth of unclaimed property for 150,000 individuals. In 1994, the General Assembly transferred responsibility for the unclaimed property fund to the Kentucky Treasury Department. In the last five years alone, about $10 million has been returned to rightful owners by the Treasury Department.
Basic Concepts of Unclaimed Property
When trying to renovate and improve the process of returning unclaimed property to taxpayers, one of the main challenges the Kentucky State Treasury faced was educating Kentuckians on the basic concepts of unclaimed property. This section will briefly describe the major components and terms used in an Unclaimed Property program.
* Unclaimed property consists of all intangible property unclaimed by its owner for a specific period of time, called a dormancy periods. Unclaimed property may include: dormant savings and checking accounts, unclaimed wages, dividends, credit balances and any type of outstanding checks. Tangible property may include contents of safe deposit boxes or items left in safekeeping.
* A holder is any business entity with two or more individuals doing business in Kentucky.
* Kentucky and other states have unclaimed property laws to protect the property rights of the owner and to reunite the owner with the property, to relieve the holders of the expense and liability of carrying the property, and to provide a centralized search location for citizens. …