Almost 20 years ago when my mother married my step-father, they came to me for estate and financial planning. My parents created their own trusts and set-up some assets in joint accounts. To simplify things, they consolidated all 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 in January 2010. Because we had created a trust, there was no probate for my mother. Everything passed to his children, my brothers and me effortlessly.
Even with the best planning, things can slip through the cracks…
My mother had purchased a small amount of Detroit Edison stock that had a dividend reinvestment plan in the 1970s. When she married my step-father, Dale, we moved her stocks to a brokerage account. The dividend reinvestment plan accidentally stayed with Detroit Edison and those shares continued to reinvest for another 20 years. That dividend reinvestment plan was being missed after my mother’s death and ended up in the Unclaimed Funds Department with the Department of Treasury for the State of Michigan.
You can imagine how shocked I was when I received a letter from the State of Michigan stating that I had unclaimed funds. To my surprise, there was $4,800 of Detroit Edison stock in the names of my mother and my step-father just sitting there unclaimed.
This demonstrates two things:
- That even with the best planning, something can be missed.
- The power of compound interest. I could not believe how much my mother’s dividends had grown over the last 20 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.
Because I had all the financial and estate planning in place, accessing these funds was relatively easy. I just needed to send in a copy of the claimant form along with a copy of the pour-over will, death certificates, and the trust document that stated I was the successor trustee so a check could be issued to the trust. This allowed me to distribute the funds, without a probate or any attorney fees, to the trust money market account that was still open at the time.
Note: A pour-over will is a testamentary device where the writer of a will creates a trust and decrees in the will that the property in his or her estate at the time of death shall be distributed to the Trustee of the trust.
The State of Michigan representative was thrilled I had all the documentation and said it made her job so easy. I’m grateful that Michigan’s Department of Treasury contacted me regarding these unclaimed funds, and even more thankful that my mother’s estate was set up so that the funds could be easily claimed. If you or a loved one receive a notice that you have unclaimed funds from the government, be sure to follow up on it. You can check the U.S. Government site: https://www.usa.gov/unclaimed-money to find out. Feel free to contact me if you have questions about your planning at firstname.lastname@example.org or call me at 248-417-6523.
Katana Abbott, CFP® practitioner, is a Life and Legacy Coach™, host of the Smart Women Talk Radio™, founder of the Smart Women Companies with over 1 million subscribers globally, inspirational speaker and author of several books.
She began her financial planning career in 1987 and became a Certified Financial Planner™ practitioner. In 2003, Katana created Smart Women’s Coaching® to offer financial coaching and educational workshops for women in transition who are dealing with caregiving, death of a loved one, divorce, retirement or looking to create or grow a business. She founded Smart Women’s Empowerment in 2008 to bring free financial empowerment resources and programs to women around the world through her team of Contributing Experts. www.katanaabbott.com