The Colorado Treasurer’s Office was convinced: There was a $250,000 bank account sitting in its unclaimed property division, and staffers’ research had located its rightful heir, the son of its deceased owner.
The issue was convincing the heir, who said it couldn’t possibly be his money, because he had handled settling the estate and would have known. But the division head of unclaimed property persisted, digging further, and confirmed a hefty payout for the man and his two siblings.
“People get separated from their property for a variety of reasons,” Colorado Treasurer Dave Young said in relaying the anecdote June 14.
“The lion’s share of what we deal with is money. But we do have safety deposit box contents as well. Anybody that got separated from their safety deposit box contents, and they (state) can’t find the owner or their heirs, they transmit that to us in the treasury and we hold it.”
Technological advancements since the 1980s are increasing the odds of reuniting people with unclaimed property the state holds in trust.
Unclaimed property can be cash, bonds, stocks, life insurance policies, un-cashed checks and property such as jewelry or other tangibles. The treasurer currently maintains a list with more than 1.7 million names of individuals and businesses and has about one billion dollars-worth of unclaimed property.
“That is substantial. We’re working pretty intensely to try to return that to people,” said Young.
After three years have passed, the state can auction off contents from safety deposit boxes to clear up space in the state vault. However, it must continue to hold the money from proceeds of those auctions for potential claimants.
“If we think we’re on the pathway to finding the rightful owner, it may go past three years. If we’re kind of on the track of reuniting some of the property, we don’t auction it. If we do auction it, we still hold the cash for them. It’s a trust fund,” Young said.
Young’s office keeps track of $200 million in interest from the Unclaimed Property Trust Fund, as well as $800 million in interest from the Public School Permanent Investment Fund. State law limits the type of investments that can be made with the people’s money, and keeping that money safe is the “No. 1 priority,” Young said.
The allowed investments from the Public School Permanent Investment Fund require precise accounting on a daily basis, also undertaken by his department.
The Unclaimed Property Trust Fund’s interest helps fund tourism in the state. The principal, though, can also be an attractive pot of money to legislators looking to meet many needs.
“That gets controversial, because that’s not really general fund money. This is actually people’s personal property, or their personal cash,” Young said.
It falls to him to pump the brakes in these instances: If the principal is spent, and then there is a valid claim on the money that went out, the Legislature will have to dip into the public purse to pay it back.
That might not be a problem during a strong economy, but it would be during a downturn in which the general fund is stressed — and people start looking everywhere for every dollar they can find, potentially leading to more unclaimed property claims.
This past session, the Joint Budget Committee pulled $30 million for transportation from the Unclaimed Property Trust Fund principal and another bill would, starting in 2020, provide $30 million a year for three years for affordable housing from the fund.
The Treasury was neutral on the bill, but cautioned the Legislature that if claims were made on the money, it would have to be reimbursed through the general fund.
“It’s tough, because I’ve sat in that position on the JBC and as a legislator and we have some really intense needs around the state,” Young said.
“We see this in rural Colorado more than anywhere else, where people are struggling to get by. Our school systems are in stress. Our highway systems are in stress. Health care is exploding. I understand from the needs side how crucial it is, but this particular fund line is risky to tap into.”
The state many years ago analyzed the history of unclaimed property and paid-out claims, using the data from a 20-year period to generate a forecast and — to avoid being in the type of situation Young described — set aside a reserve of untouchable money based on that forecast.
This provided a good sense of what has happened, but it might not be accurate when it comes to the future, particularly as newer technology makes it easier for people to research, find, and claim lost money and property, the treasurer said.
“Now we know technology is a bigger deal. It allows people to search out their claims. We’ve implemented in the unclaimed property division technology that allows people to make their claims more easily,” Young said.
He encouraged people to visit the Great Colorado Payback site, https://colorado.findyourunclaimedproperty.com, just in case there is money or property in the state vault that rightfully belongs to them.
On top of the website, the unclaimed property division is also being proactive in its research. As well, it has knocked down a 12,600-claim backlog from about a year ago to 2,300.
“Those efforts to be more proactive are kind of the wild card. We have this 20-year rolling history of claims, but if we’re more proactive, is that actually going to increase the number of claims we have? We may have to ask the state for money from the Legislature if we keep going in that direction,” Young said.
The state’s law governing unclaimed property was this yer revised along the lines of the federal Revised Uniform Unclaimed Property Act. The revision is the first real overhaul since 1987 — a time when technology was very different and the law, for instance, required notification by U.S. Mail.
“We’re just trying to move ourselves into the 21st Century here. It’s another of those wild cards that might lead to more claimants finding their money and retrieving it,” Young said.
The Treasury doesn’t yet know the full effects of the newly revised law, however, uniformity of unclaimed property laws state-to-state would be helpful, he also said.
“People move in and out of states and if we have more consistency in the way states actually approach their unclaimed property, I think it would be helpful,” Young said.
Katharhynn Heidelberg is the Montrose Daily Press assistant editor and senior writer. Follow her on Twitter, @kathMDP.