By GREG O’DONNELL, INVESTMENT ADVISER | O’Donnell Financial Group
More than $40 billion in unclaimed cash & property waits to be returned. At first glance, that figure seems staggering, unbelievable — and, yet, it is true. To be more exact, the National Association of Unclaimed Property Administrators (NAUPA), a coalition of state unclaimed property programs, puts the total at $41.7 billion.
How do you find out if some of this money is rightfully yours? First, you can either go to missingmoney.com (a NAUPA website), or the website of your state’s unclaimed property program. A search should let you know the answer. Aside from searching in the state where you currently reside, you can also search for unclaimed assets in states where you previously worked or lived.
In all 50 states, financial institutions and insurers must escheat (i.e., hand over) account assets to the state if the owner has failed to contact the institution or insurer for a year or longer. The onus is then on the state’s unclaimed property department to find the owner, or at least make public that such assets are waiting to be claimed. How long does an original owner or an heir have to claim the forgotten assets? Usually, there is no statute of limitations.
All kinds of assets are held by these state programs — payroll and dividend checks that were never cashed, death benefits from life insurance policies, distributions from trusts and, of course, stock certificates and property that once occupied safe-deposit boxes.
This is just at the state level. More unclaimed money awaits at the federal level; although, no convenient central database exists to find it. (Unclaimed.org, another NAUPA site, is a good place to start.) In March 2016, the Internal Revenue Service announced that this year’s tax deadline is also the deadline for Americans to claim almost $1 billion in federal income tax refunds from the year 2012. (Next April will represent the last chance to claim 2013 refunds.) Beyond what the IRS has, federal coffers contain unredeemed U.S. savings bonds, checking and savings account deposits from failed banks and credit unions, refunds on FHA-insured home loans and unremembered pension money.
Tax exemptions on municipal bonds are hardly the sexiest political issue surrounding Donald Trump’s transition. But a group of mayors, meeting with the president-elect at Trump Tower on Thursday, were surprised with welcome news when they pressed Trump to keep the exemptions.
“He’s the president-elect, and he said he would keep it,” said Tom Cochran, the CEO and executive director of the U.S. Conference of Mayors. “My lobbyist has been up on the Hill, and they said to us everything is on the table. We didn’t know what would happen.”
He added: “As soon as the sun comes up, I will be contacting the authorities in Speaker Ryan’s office and others on the Democratic side that we were encouraged by the president-elect.”
A spokesman for Trump, who convened the mayors in Trump Tower for about 30 minutes, didn’t respond to a request for comment. Trump has vowed to overhaul the country’s tax code when taking office, and mayors have feared the exemption could be in jeopardy. It has been targeted by some Republicans as too pricey, particularly when the bonds are used to build sports arenas and stadiums.
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The more than $5 billion exodus from municipal-bond funds in November is creating bargains in an often overlooked corner of the tax-exempt debt market.
An index of municipal bonds that are pre-refunded — or paid off as they come due with the proceeds of Treasuries that are held in escrow — yields 1.53 percent, the highest since July 2009. To meet redemptions, mutual-fund mangers are selling the bonds, which are rated AAA because they’re secured by the income from the federal-government debt.
The selloff triggered by Donald Trump’s presidential victory drove state and local-government securities to a 3.46 percent loss in November, the worst month since September 2008, when financial markets seized up after the collapse of Lehman Brothers, according to the S&P Municipal Bond Index.
The Republican’s pledge to cut income taxes and boost spending on infrastructure stoked speculation that the Federal Reserve will need to increase interest rates more aggressively to keep inflation from picking up. Tax cuts could also lessen demand for municipal bonds, whose interest payments are exempt from the federal income tax.
Finding money you didn’t know you had is like discovering lost treasure. For many people, there’s treasure to be found in old, forgotten bank accounts.
Las Vegas resident Michael Catania was surprised when he plugged his name into MissingMoney.com , a website for unclaimed-property searches, and learned that Massachusetts was holding money for him from a forgotten bank certificate of deposit.
The adjunct music professor had lived in four states over the past decade, including Massachusetts, where he had opened the $1,500 CD that had long since matured.
“I’m embarrassed that I forgot about an account with that much money,” he says, “but I was moving around a lot and the bank didn’t know how to reach me.”
According to the National Association of Unclaimed Property Administrators, a group of state officers, nearly $42 billion is sitting in state coffers, having come from financial institutions and other businesses with dormant accounts. In addition to old bank accounts, the property often is from unclaimed insurance policies, uncashed paychecks and abandoned safe-deposit boxes.
Save for college and enjoy some tax breaks too.
Formally known as a qualified tuition program or QTP, a 529 plan is a tax-advantaged way to save money for college. The “529” refers to the section of the IRS tax code that authorized the plans back in 1996.
While you don’t get a federal income-tax deduction for your contributions to the plan, they may be deductible on your state tax return if you invest in the plan run by the state you live in.
What’s more, the earnings on your account will not be taxed by the federal government, or by many states, as long as you use the money to pay qualified educational expenses. Those generally include tuition, mandatory fees, room and board, and required books.
PORTLAND, Maine — September 30, 2016 — Portland Mayor Ethan Strimling, the Superintendent of Portland Public Schools Xavier Botana, and Ben Gilman, Senior Government Relations Specialist at Maine State Chamber of Commerce joined Finance Authority of Maine (FAME) CEO Bruce Wagner to announce a major statewide effort called Invest in ME 2030. This new effort is intended to have a lasting impact on the economic future of the state of Maine. The announcement was made during an education rally at Portland’s Deering High School with students from the high school, Longfellow Elementary School, and Lincoln Middle School. Supporters in attendance challenged everyone in the state to get involved to reach the goal. Prior to the announcements at Deering High School, students participated in financial education activities designed to help them think about their future and what education will be needed to pursue their career and life goals.
Wagner announced FAME’s Invest in ME goal: By 2030, all Maine families are saving for higher education and Maine will have one of the lowest average student loan debt rates in the nation.
Helping Maine’s 256,000+1 children actively save for higher education would help alleviate their need to borrow more later. About 64 percent of Maine college students graduate with debt and the average student loan debt per student in Maine is $30,908, putting Maine 7th highest2 in that regard when compared to other states.
“Today we want to draw statewide attention to the economic impact an under-educated workforce and growing student debt are having on our state and stress the importance of starting to save for college or any form of postsecondary education early,” said Ben
Gilman. “We chose Stevens Avenue in Portland to announce this major statewide goal because it’s a unique street in our state and in America—where a child’s entire educational journey can be traveled over the course of a few blocks. On this one street, you can stroll from an early childhood center, past an elementary school, a middle school, a couple of high schools, a college, and a graduate school campus.”
Gilman continued: “We are asking all of Maine’s political leaders, business leaders, community leaders, parents, grandparents, and educators to help us reach our goal. There will be something everyone can do to support the future faces of Maine and the future of our state.”
“We know that children with savings are six times more likely to pursue higher education.3 Building college aspirations, increasing completion of postsecondary education, and making it possible for more children to go to college or trade school by increasing college savings and lowering student debt can play a significant role in boosting Maine’s overall economy,” Gilman concluded.
Maine’s Workforce—Growing Need for Skilled Workers
Currently, many Maine employers face significant challenges filling open positions that require higher education qualifications. The state faces a shortfall of skilled workers. FAME is working with statewide governmental and non-governmental agencies, employers, and educators on a workforce development coalition. They are seeking to increase the number of Maine workers who have some type of postsecondary certificate or degree. The reasons why these efforts are critically important include:
* If Maine were to grow 65,000 more jobs, 60% of the workforce would need education beyond high school to meet future workforce demands.4 Only 54 out of 100 students in Maine will go to college and only 39 will graduate within 6 years.5
* College savings increase college aspirations AND completion; low and moderate income families with children are 3 times more likely to attend college and 4 times more likely to graduate from college if they have college savings between $1- $499.6
* Economic growth depends on a highly educated workforce, and instilling aspirations to higher education begins at an early age.
* Student debt limits graduates’ job choice and their ability to launch a new business, buy a home, start a family, and save for retirement.7
“The best way to attain an educated workforce to meet the changing labor and economic needs in our state is to invest in education beyond high school and make it
available and affordable for more of our youth,” said Bruce Wagner, CEO of FAME. “We want to encourage everyone in Maine to take part in the “Invest in ME 2030” movement and help Maine reach this goal. It will take all of us to make a significant impact. To get involved, visit InvestinME2030.com to find action items that Maine people can deploy to make progress throughout the state. FAME will also be hitting the road to engage businesses, organizations, and families to inspire each of us to invest in the future faces of Maine.”
Scholarship Sweepstakes Announced—16 $1000 Scholarship Prizes for Mainers
During the event, to spark statewide awareness with Maine families about savings for higher education and reducing debt, FAME Director of Education Martha Johnston announced that on October 1, 2016, FAME is launching the Invest In ME Sweepstakes. The sweepstakes will award $1,000 scholarship prizes to 16 NextGen accounts, selecting one random winner from each of Maine’s counties. Participation in the sweepstakes does not require an existing NextGen account and no purchase is necessary to enter.* FAME invites everyone to visit NextGenForME.com for details about the sweepstakes and how to enter.
*An account will be required to be opened in order to receive the prize.
New Student Loan Resource Unveiled
In an effort to help Maine residents who pursue higher education not to be saddled with debt, FAME, along with its network of local Maine lenders, recently unveiled an online resource: TheLoanforME.com. Designed to be the ultimate student loan resource for Maine, the website helps families become informed borrowers, especially when they need to close the gap between the cost of higher education and what they have saved and might obtain through financial aid, grants, or scholarships. The online resource also offers help to Maine residents who want to refinance or consolidate existing student debt.
“We’ve been helping Maine families for decades be better informed about borrowing and finding affordable solutions to help reduce student loan borrowing up front,” said Johnston. “The Loan For ME can also help people with existing student loan debt explore ways to lower monthly payments and have more dollars to build their lives.”
NextGen is a Section 529 plan administered by the Finance Authority of Maine (FAME). Before you invest in NextGen, request a NextGen Program Description from your Merrill Lynch Financial Advisor or Maine Distribution Agent or call Merrill Edge at 1-877-4-NEXTGEN (877-463-9843) and read it carefully. The Program Description contains more complete information, including investment objectives, charges, expenses and risks of investing in NextGen, which you should carefully consider before investing. You also should consider whether your or your designated beneficiary’s home state offers any state tax or other benefits that are only available for investments in such state’s
Section 529 plan. Merrill Lynch, Pierce, Fenner & Smith Incorporated, a registered broker-dealer, member SIPC, is the program manager and underwriter.
About the Finance Authority of Maine
FAME is a quasi-independent state agency that expands business and educational opportunities to help Maine people and businesses succeed. FAME helps to lead the creation of good paying jobs by working at the nexus between economic development and workforce development.
To learn more about FAME, please visit FAMEmaine.com
About the Maine State Chamber of Commerce
The Maine State Chamber of Commerce advocates on behalf of its 5,000 member companies before the Legislature and the state’s regulatory agencies and through educational and networking events to ensure that the state’s business environment continues to thrive by lowering the cost of doing business in Maine. Its advocacy efforts focus on seven central themes: tax reform, health care, workers’ compensation, economic development, environmental, education, and government spending/budget.
WASHINGTON, D.C. – The National Association of State Treasurers (NAST) recognized two state treasurers and three corporate affiliate partners during its 2016 Annual Conference in Seattle, which took place from September 11-13th at the Fairmont Olympic Hotel.
Oklahoma State Treasurer Ken Miller, NAST’s 2017 President-Elect, presented the awards and said, “2016 marks NAST’s 40-year anniversary, so I am proud to celebrate this milestone by honoring some of the men and women who helped pave the way for this dynamic organization. NAST has addressed some of the country’s greatest fiscal challenges over the past four-decades, and will continue to do so with the help of these outstanding individuals.”
Washington State Treasurer James L. McIntire received the 2016 Jesse M. Unruh Award, which recognizes an active treasurer’s outstanding service to the association, the profession and his or her state.
Treasurer McIntire is the acting President of NAST, and was elected as Washington’s 22nd State Treasurer in 2008. He holds a PhD in Economics from the University of Washington, where he founded and directed the Fiscal Policy Center and taught economics for 25-years. He began his public service career working in the U.S. Senate for Hubert Humphrey, and was a five-term State Representative prior to becoming State Treasurer.
Virginia State Treasurer Manju Ganeriwala received the 2016 Harlan Boyles-Edward T. Alter Distinguished Service Award, which recognizes a dedicated public servant whose outstanding career in government has provided a respected voice for NAST at all levels of state government.
Treasurer Ganeriwala is a past-president of NAST and was appointed State Treasurer of Virginia in 2009. Prior to serving as Treasurer, she served as deputy secretary of finance. Her public service career also includes leadership roles with the Virginia Department of Medical Assistance Services and the Virginia Department of Planning and Budget. Her experience also includes working in strategic planning and long-range forecasting for the East Ohio Gas Company in Cleveland.
Former Maine State Treasurer David Lemoine received the 2016 Lucille Maurer Award, which recognizes a former treasurer for their outstanding service to association. Treasurer Lemoine served in the Maine State Legislature from 1998 to 2004 before becoming the State’s Treasurer from 2005 to 211. He currently serves as the Managing Director of Xerox finance and Revenue Solutions and is a member of the NAST Corporate Affiliate Advisory Board. He is the NAST Corporate Affiliate representative and serves on the National Association of Unclaimed Property Administrators Executive Board.
Francie Heller, Managing Partner at Heller Advisory, received the 2016 Corporate Affiliate Award, which recognizes a NAST corporate affiliate’s outstanding service to the organization. Over the past year, Heller has served as NAST’s Corporate Affiliate Board Chair and has advocated for the interests of the association’s Corporate Affiliate Partners. She is a graduate of Boston University and the University of Georgia.
Arthur Marcus received the 2016 NAST Founders Award, which recognizes a NAST founding member for their outstanding contributions to the organization. Marcus has been with NAST throughout the organization’s 40-year history. As an original member—Marcus was influential in securing the financial resources necessary to create the organization, and remains an ardent supporter of NAST.
To achieve increased transparency between public retirement funds and private equity partners, the National Association of State Treasurers endorses the use of the Institutional Limited Partners Association’s Fee Reporting Template.
As many in the regulated community were enjoying some well-earned time away from the office last week, California State Treasurer John Chiang was hard at work in Sacramento announcing new policies aimed at curbing the ability of municipal bond counsels, underwriters, and financial advisors to participate in local bond election campaigns. These policies are part of a new enforcement initiative launched July 27 that requires municipal finance firms seeking California state business to certify that they will no longer make contributions to local bond election campaigns.
As detailed in Treasurer Chiang’s letter to law firms, underwriters and financial advisors currently in the California state bond pool, continued participation in the underwriter pool will now be contingent upon the making of “an affirmative statement that the firm, or any officer, director, partner, co-partner, shareholder, owner, or employee of the firm, will not make any cash or in-kind service contributions … to promote or facilitate any bond or ballot measure in California.” Additionally, access to the underwriter pool will also be premised on a concurrent certification by covered entities and officials that they will not provide “bond campaign services” in connection with California municipal bond campaigns or ballot measures.
Millions of Americans do not have the financial resources they need to access higher education, buy a home or retire comfortably. If we want to continue to compete globally, it is time for Congress, state governments, the private sector and communities to renew our effort to raise the level of financial literacy and security in our country.
Many Americans are in a perilous financial situation today, with nearly 75 percent reporting that they live paycheck to paycheck. Only 40 percent of US adults keep a budget and track their spending, while 27 percent of families have no savings at all. Alarmingly, only one-third of parents have a plan to pay for college expenses, even as student loan debt has skyrocketed 235 percent in the past decade. And only 26 percent of people are expected to be able to retire in a traditional way.
Like all state treasurers we are on the front line of these issues, overseeing financial tools such as 529 college savings plans and pensions, and we are deeply troubled by these statistics. This month – Financial Literacy Month – we will continue our efforts to raise awareness of the importance of financial literacy and work with the private sector and our government partners to do the same.