You can imagine how shocked I was when I received a letter from the State of Michigan stating that I may have unclaimed funds with the government. How many times have you received emails that you delete immediately because you know they are a hoax. Well here is one that is legitimate.
Almost 20 years ago when my mother married my step father, they came to me for estate planning and financial planning. My parents created their own trusts and also set up some assets in joint accounts. To simplify things we consolidated all the financial assets into a brokerage account with American Express Financial Advisors and I was their financial planner. Everything was perfect, right? Well almost.
In 2007, my step father passed away, and some assets were transferred to my mother via joint ownership or beneficiary designation. Other assets stayed in his trust until she passed away which was January 2010. Because we had created a trust, there was no probate for my mother. Everything passed to my brothers and me effortlessly.
The beauty of planning early:
- What was beautiful about this process, is that because the planning was done years earlier when they were both healthy we were able to purchase long term care insurance which protected all my step father’s assets for his children. Also bought the insurance when they were both insurable and the premiums were very low.
- The second big benefit of planning early was that we were able to focus on spending quality time with both of my parents because all the planning was in place and we could simply focus on them.
Even with the best planning, things can slip through the cracks…
There were two items that slipped through the cracks.
- Even though we documented everything before my step father passed, there was one life insurance policy (and he had many of them) that was still left to his deceased wife. It was one associated with one of his government pensions. What ended up happening, is these funds ended up going to my step father’s children instead of my mother.
- The second is the purpose of this article. My mother had purchased Detroit Edison stock years ago and had set up a dividend reinvestment plan. This was back in the 70s. When she married Dale and we moved the stocks to the brokerage account, the dividend reinvestment plan stayed with Detroit Edison and those shares continued to reinvest for 40 years.
Last week, I got on the phone with the Department of Treasury for the State of Michigan and talked with a representative. After reviewing all the needed date, social security numbers, former addresses and maiden names, we were able to identify these “unclaimed funds” with the State of Michigan. There was $4800 of Detroit Edison stock in the names of my mother and my step father just sitting there unclaimed.
This demonstrates two things:
- How complicated the estate planning and financial planning process is and that even a Certified Financial Planner can miss something like this.
- The power of compound interest. I could not believe how much my mother’s dividends had grown over the last 40 years.
The take away here is to do your financial and estate planning as early as possible and don’t try to wing it. It’s a very complicated process, and having a team in place will make all the difference.
In my mother’s case, since we had a trust and there was no probate, and I have all the needed documents, accessing these funds will be relatively easy. I still have a trust account open, and will send in a copy of the claimant form, the will, death certificates and the trust document that states I am the successor trustee and they will cut a check to the trust. This will allow me to distribute the funds without a probate or any attorney fees.
To check if you have unclaimed property, visit your state Treasury Department. Here in Michigan for example the website is: http://www.michigan.gov/treasury
I hope you find this article helpful and empowering. If you are interested in creating your financial and estate plan, I have created a wonderful financial organizer planner with step-by-step instructions for:
- finding your stuff
- getting organized
- and getting smart about your money
It’s actually a 33 page ebook and totally free. You can pick up your free copy at www.HowToCreateProsperity.com Just enter your name and email for my Smart Women’s Prosperity System and then make an appointment with yourself to get started even if it’s just one step at at time.
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Katana Abbott, CFP, CSA
Founder, Smart Women’s Coaching Cafe
The Smart Women’s Prosperity Coach