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Monday, September 27, 2010

Michigan wants to escheat funds in Just 3 years to solve budget problems

According to the Detroit News, the state of Michigan is considering to tap unclaimed cash to meet budget shortfalls. Essentially, Michigan's budget deficit could be temporarily helped out by a $200 million (or more) cash infusion from changing the regulations around how the state collects unclaimed funds.

Currently, financial institutions have between 5 and 15 years to turn-over dormant accounts and safe deposit box contents to Michigan's treasurer once they lose contact with the rightful owners. Governor Jennifer Granholm and the State congress want to change the law to shorten the period of time to just 3 years. Should the law pass, the state will get a one time large infusion.

Apparently the lawmakers changed the law to make sure that travelers checks aren't turned over to Lansing until 15 years have elapsed.

In a typical year, the state collects about $115 million and pays out about $70 million. The largest single claim on the state of Michigan's unclaimed assets department was over $1 million from a family of a deceased man who had a bunch of stock that his heirs didn't know about.

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