When Valorie Golin went to visit her parents in March, the first thing she did was get into their bank accounts.
Golin had no larcenous intent. Quite the opposite. The 32-year-old banker was trying to keep the state of Pennsylvania from seizing her parents' savings.
You may assume it's safe to deposit money in a bank -- or buy stocks or other financial assets -- and then simply leave your account alone. It's not. Under most state laws, if you don't initiate a transaction or communicate with the financial institution about it, the account is considered dormant. After three years of inactivity, your assets typically can be turned over to the state.
"You've got to do something to make sure the account is considered active," said Golin, an expert on dormant accounts with ING Direct, an online unit of the financial services giant ING Group. "Otherwise the $10,000 you have saved for a rainy day might just be gone when you get around to trying to use it."
The National Assn. of Unclaimed Property Administrators, a group representing state treasurers offices, says $4.7 billion in "abandoned" assets was turned over to states in fiscal 2006, the latest year for which figures are available.
That brought to $33 billion the amount of such assets in state hands. That property was seized from 117 million people, meaning there's a good chance some of it is yours.
The average works out to $282 per person. It won't pay for retirement, but it's nothing to sneeze at either.
Laws on abandoned property were enacted to protect consumers -- to keep banks from eating up dormant accounts through annual account fees. Theoretically, the states are simply holding the assets in safekeeping until the owners turn up to claim them.
But over the course of the last few decades, the system has become a source of cash for states, which generally do not pay interest on the abandoned funds and can use the money to fill budget holes until it is claimed. Only a fraction of these assets are ever claimed.
Anyone who sets aside money for long-term goals, such as college expenses or the final years of retirement, is especially vulnerable.
"There's a guy I work with who got a certificate of deposit when he got out of high school and was all excited when he graduated college because he was going to use it," Golin said. "It was gone."
The money can be retrieved, but it's often difficult. The first challenge is finding the assets; the second is filling out the copious paperwork required to get it back. The process can take months.
