By Aleksandra Todorova
Senior Writer, SmartMoney.com


DO YOU THINK GETTING free money requires winning the lottery? Not when you're talking about money you didn't even know you had coming to you.

Consider this: The U.S. government and various state organizations currently hold more than $39 billion in lost assets belonging to U.S. citizens. From unclaimed life insurance proceeds and lost tax refunds to matured Treasury bonds and surprise inheritances, here's where to look for a financial windfall.

1. Your State's Treasurer

Believe it or not, there could really be a treasure buried in your state's treasurer's office. That's because any assets you may have owned or inherited but haven't claimed for three or more years eventually end up in the state treasury's unclaimed property division.

The exact time frame needed for property to be reported as unclaimed may vary by state and by the type of property, though three to five years is generally the norm, says George Tamayo, manager of Texas's unclaimed property division. States currently hold more than $32.8 billion in orphaned money, according to the National Association of Unclaimed Property Administrators (NAUPA). You may discover the balance of forgotten bank accounts, uncashed payroll or commission checks, even unclaimed rebates or gift certificates.

The good news: Finding unclaimed assets is easy -- and free -- with MissingMoney.com, a national database currently supported by 40 of the 50 states. If your state isn't on the list, go to NAUPA's web site, and use its "state by state search" option. Most states will let you claim the property for free, though some may charge a small fee. In Texas, for example, receiving claim payments of $500 to $5,000 will cost you 1% of the balance, and claims above $5,000, 1.5% of the balance.

Unclaimed property is typically kept by the state with the last-known address your old bank or employer had for you, so if you've moved around a lot be sure to search all of the states where you've lived. Be warned: Some companies may offer to find unclaimed property for you, but they'll charge a hefty fee -- typically 20% to 30% of the amount they recover. Why pay when you can find out for free?

2. Your Life Insurance Company

Life insurance proceeds are a massive chunk of the unclaimed assets states take in each year. That money includes more than just old policies forgotten by heirs, says Steven Weisbart, spokesman for industry group Insurance Information Institute. Several years ago, many large insurance companies -- including MetLife and Prudential Financial -- went through a process called "demutualization" that gave policy holders shares in the company when it started trading publicly on the stock market. Those shares could be redeemed for cash.

The problem is that the letters informing policy holders about demutualization didn't reach a lot of folks because they hadn't updated their address information with their insurer. Even those who received the letters, typically long and fraught with legal terms, never read them. "And usually what [the letters] said was 'You have X number of shares as a result of demutualization, you can sell them back to us and make cash.' But people didn't get that far," says Weisbart.

To find out if your life insurance company has money waiting for you, check with your state's unclaimed property office or call your insurer directly.

3. Uncle Sam

So you moved last year and never received your tax refund? For state tax refunds, contact the state's unclaimed property office. For federal refunds, go to the IRS web site and try its "Where's my refund?" search tool. You'll need to know the exact amount of your refund in order to track it. If you can't track down this year's refund, don't fret. The IRS will catch up with you when you file your taxes next year and send you a check for the amount you're owed, says an IRS spokesman. (That is, assuming that the original check the IRS sent you was returned to them uncashed. If the check was not returned to the IRS, you'll have to call and request that it be reissued. The IRS will send you form 3911.)

4. The Government

Here's something that will make Treasury bonds sound exciting: Currently, more than $15 billion worth of savings bonds have matured and are sitting unclaimed by their owners, according to the U.S. Treasury. Unfortunately, you can't go to your state treasury department to see if there's bond money waiting for you -- at least, not yet. The National Association of State Treasurers, or NAST, is working with Congress to pass proposed legislation to change that, says Tamayo. The legislation would allow the federal government to share with states information on holders of matured bonds, such as name and last-known address.

In the meantime, use the U.S. Treasury's Treasury Hunt search engine that allows you to search for matured bonds using your Social Security number.

The government may also have some special benefits or grants waiting for you, especially if you're a student, veteran or considering adopting a child. To find out, click here.

5. Pensions

If you or a family member worked for a company with a pension plan that was terminated -- the company went bankrupt or was bought out by another company, for example -- you may be eligible to receive benefits from the Pension Benefits Guaranty Corporation (PBGC). Last year, PBGC held $133 million in unclaimed benefits for 32,000 people. That averages nearly $4,200 per person. To see if you have anything coming your way, search the PBGC database.

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