Unclaimed & Abandoned Property: The Escheatment Process

escheatment, escheatment process, estate planning services, unclaimed personal property, Wheaton estate planning attorney, abandoned assets, abandoned property, unclaimed assetsWhile hardworking Americans do their best to ensure family and loved ones inherit their property and savings, unattended or abandoned assets risk being turned over to the state. This process is called "escheatment," and it was established centuries ago to prevent unclaimed properties from sitting in limbo without a recognized owner.

According to the U.S. Securities and Exchange Commission, financial institutions in every state must file a report when personal property goes unclaimed or abandoned for a certain period of time. State laws establish these time periods.

Brokerage firms must abide by these laws, and for an account to be considered unclaimed or abandoned, a reasonable effort must be made to contact the owner of the account. If this proves unsuccessful and the account remains inactive for the specified time period, the state requires the firm to report the account. Through "escheatment," the state claims ownership of the account.

The state treats these accounts as bookkeeping entries. Former account owners can make claims against these entries. Generally, the state will sell securities in these accounts and treat proceeds as state-held funds. If the account owner files a legitimate claim, the state may provide a cash payout equivalent to the account's value before escheatment. This payout will not include interest or dividends from the time following escheatment.

The Escheatment Process at Work: A Recent Example

A recent article posted in the Madison Record reports the story of a maiden millionaire who passed away with no heirs. As a result, her $1.3 million estate was turned over to the state. Shortly after, the courts received more than two dozen ownership claims.

Such a scenario is a nightmare for anyone with relatives who own substantial property; however, million-dollar estates are not the only ones at risk. Bank accounts, retirement funds, money orders, and stocks are all susceptible to being reclaimed by the state after a certain period of time.

The best way to avoid escheatment is to contact a lawyer who provides estate planning services. Even if you do not have heirs, you can appropriate your funds and assets to charitable organizations or other causes.

If you require the services of a Wheaton estate planning attorney, Stock, Carlson, Flynn & McGrath, LLC can help. With a compassionate approach backed by 30 years of legal practice, our attorneys provide each client with the attention and guidance they need to develop comprehensive estate plans. To schedule an appointment, please call us at 630-665-2500.

Estate Planning: Is it Different for Women?

DuPage County estate planning lawyer, estate planning, financial power of attorney, beneficiaries for insurance, elderly caretaker, estate planning for women, healthcare power of attorneyEstate planning is important for both men and women. However, there may be different issues that women, specifically, need to address. Statistically, women have a longer life expectancy. And according to the U.S. Census Bureau, 36 percent of women 65 and older are widowed, while only 12 percent of men 65 and older have lost their spouse.

Data also shows that women are more often the custodial parent of children and are often the caretaker for elderly parents or relatives, more so than men. Due to these differences, women have a different psychological approach to estate planning. They are so busy taking care of everyone else they "forget" to take care of themselves.

For married women, it is important to plan in the event that something happens to their husband, especially if the husband has been the major breadwinner during their marriage. It is also critical to know the type of estate planning the husband has put into place.

For example, how is the husband's pension plan set up? Many pension plans are set up so that if the retiree collects their full maximum benefit, the payments will stop upon the retiree's death, thus leaving the surviving spouse with $0 income coming in every month.

However, no matter what a woman's marital status is, it is critical that she have an estate plan. The first steps to forming one include:

  • Naming a financial power of attorney who will make the financial decisions if the individual becomes ill or incapacitated;
  • Naming a healthcare power of attorney who will make medical decisions if the individual becomes ill or incapacitated;
  • Specifying end of life wishes;
  • Naming a guardian for any minor children;
  • Meeting with financial institution representatives to ensure that the titles of accounts are the best suited for financial needs; and
  • Verifying that all beneficiaries for insurance and pensions are current.

Estate planning can feel overwhelming, as there are several factors to consider. Contact an experienced Wheaton estate planning attorney to help you with these important decisions.

Does Everyone Need Estate Planning?

advanced medical directives, durable power of attorney, Illinois estate planning attorney, need estate planning, power of attorney, Wheaton estate planning attorneyWhether or not you choose to believe it, estate planning is not only for the incredibly wealthy in the world. This is a very important aspect of life for people of all income levels.

And with that said, you will want to know what will happen to your money and property once you are gone. You will want to make sure that your family is taken care of and that they know exactly what to do with your estate. This is where estate planning comes into play.

Durable Power of Attorney

A durable power of attorney is something every person should have when putting together an estate plan. A durable power of attorney will protect your property and money when you are mentally or physically unable to do so on your own. This permits another person to act on your behalf when it comes to paying bills, filing taxes, and managing property.

The Will

One of the most important aspects of planning an estate is the will. The will puts in writing what you want done with your property and finances once you pass away. If there is no will in effect, your estate might be divided based on state law, which means your heirs might not see any of it.

It is important to name an executor of your will, which is someone who will manage your will when the time comes. Should you not name an executor, the court will appoint someone, who may end up being one whom you did not want there in the first place. Also, be sure to name a legal guardian for your minor children.

Advanced Medical Directives

Advanced medical directives are vital because they let others know what type of medical treatment you want should you not be able to make those decisions on your own. These directives also put someone in charge of making medical decisions for you.

If you have questions regarding whether or not you need estate planning, contact an Illinois estate planning attorney today. Contact us in Wheaton at 630-665-2500.