Locating Unclaimed Property in Probate
Assets—Don’t Hide Them
One of the most important parts of probating an estate is locating the assets to be probated. Many well-thought-out estate plans are rendered ineffective because assets are lost or undiscovered. For example, suppose you have a life insurance policy on your life with a $200,000 death benefit. If you die without informing anyone of the existence of that policy and where the pertinent documents for it are located, it could possibly go unnoticed and never be collected by your intended beneficiaries. This is referred to as unclaimed property. What happens to unclaimed property? C.R.S. §15-12-914 governs unclaimed property in Colorado.
Unclaimed property can eventually become property of the State of Colorado. This is called escheat. Escheat occurs when there is no taker of unclaimed property in the possession of the state treasurer for 21 years. Unclaimed property is tangible or intangible property that has had no activity for a specific period of time. Unclaimed property includes, but is not limited to, abandoned financial assets such as stocks and dividends, mutual funds, checking and savings accounts, unpaid wages, securities, life insurance payouts, uncashed checks that are without activity for a certain period of time, as well as the contents of safe deposit boxes for which the box rental has expired. It does not include real estate or vehicles.
The organization holding the original obligation is required to make every effort to contact the owner and establish some form of activity on the account. However, this can be difficult if the only point of contact the organization had was the decedent, and that contact information is many years old. If they are not able to make contact, that asset is reported to and delivered to the state treasurer.
Once the property is in the custody of the state, outreach begins to try and contact the owner or beneficiary of the funds and how to collect them. The state treasurer will hold the funds until an heir comes forward, or until 21 years has passed. After 21 years has passed, the funds cannot be claimed and are deposited into the Colorado State School Fund.
Most people do not intend for their property to escheat to the State of Colorado. The best way to ensure against this happening after you have made an estate plan is to continually (at least annually) review your plan, including reviewing the identification and location of all assets you own and of all benefit that may become payable to another person upon your death. As part of our estate planning process, we help you collect and inventory of all your assets so they are easily tracked into the future. Please contact is if you would like assistance in creating an estate plan.
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