Lost and Found for Money (and Other Property)

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Question:  Fifteen years ago, when my daughter was born, I opened a ScholarShare account, California’s 529 college saving plan.  After a few years I opened a second account with the Commonwealth of Virginia’s 529 college saving plan and have been funding it ever since.  I forgot all about the California account.  Last week I received a letter from TIAA-CREF Tuition Financing, Inc., the company that manages the California ScholarShare Plan, asking me for my correct address and informing me that if I don’t reply they would send my money to the State.  They also said I needed to get my signature guaranteed with a Medallion Stamp.  I went to my bank, Bank of America, and they told me they no longer participate in the Medallion program.  What’s this all about and what should I do?

Answer: State law requires financial institutions and other businesses to report and deliver property to the Controller’s Office if there has been no customer contact for over three years.  The financial institution or other business is also required to attempt to contact the owner before they report and escheat (give) the property to the state.  That’s why you received that letter from TIAA-CREF asking for your current information.

The State of California is currently in possession of more than $7.1 billion in Unclaimed Property belonging to approximately 27.9 million individuals. The most common types of unclaimed property are bank accounts, safe deposit box contents, stocks and bonds, mutual funds, uncashed cashier’s checks and money orders, certificates of deposit, orphaned 401(k) and other retirement accounts, and matured or terminated insurance policies. 

TIAA-CREF is required to contact you and update your information before they turn your college savings plan money over to the State.  Once you re-establish your account with them, you can keep it or roll it over into your Virginia 529 plan.  TIAA-CREF’s requirement to guarantee your signature with a Medallion Stamp seems overboard to me, since Medallion Stamps are usually required for the transfer of securities, and all you are doing is verifying your contact information. 

Bank of America did terminate their Medallion Stamp program for customers earlier this year.  However, many other banks and credit unions still provide this service.  You can try a local bank, or open an account at Chase, Wells Fargo, Navy Federal Credit Union, or some other nationwide bank that still provides the Medallion Stamp service.

For readers that would like to know more about unclaimed property and perhaps find some lost money, it’s fun to search the California State Controller’s Office website here. If you’re lucky enough to find some lost money or property belong to you, the website provides information and forms to file a claim.  The website even has an “eClaim” capability that allows you to file a claim online for property valued at less than $1,000. The site also has answers to frequently asked questions.  Be sure to check out the photos of some of the more unusual items, like the 20 pounds of gold bars, the autographed picture of Neil Armstrong, a can of sardines, and a collection of police badges.

Kenneth B. Petersen CFP®, EA, MBA, AIFA® is an investment manager and Principal of Monterey Private Wealth, Inc., a Wealth Management Firm in Monterey.   He welcomes questions that you may have concerning investing, taxes, retirement, or estate planning.  Send your questions to: Ken Petersen, 2340 Garden Road Suite 202, Monterey, CA  93940 or email them to ken@montereypw.com.