In 2011, states returned $2.25 billion to 2.5 million claimants -- less than 6% of the total unclaimed funds held in state accounts.
NEW YORK (CNNMoney)
Under state laws, financial institutions and other companies are required to turn over any funds considered "abandoned." This can include jewelry left in a safety deposit box, cash in forgotten bank accounts and life insurance money that was never claimed by a beneficiary.
Those who discover they are owed missing money, might feel like they hit the jackpot -- until they try to navigate the complex rules and regulations required to reclaim it.
"The single biggest problem is establishing that you lived at an address or did business with a company back in the 70s," said Mary Pitman, author of "The Little Book of Missing Money." "But who keeps records of that?"
In 2003, Dorothy McGuire, an 80-year-old Florida resident, discovered that the state of Michigan owed her $11,924 from her deceased mother's retirement account. But after sending in a claim, she was told she would need to reopen her mother's estate, which she didn't have the money to do.
Related: $58 billion unclaimed: Is some of it yours?
Last year, McGuire decided to try again, this time hiring attorney Dan Carbone. But even after he obtained the estate paperwork and a court order demanding Michigan turn over the funds, her claim was denied.
"If there were other people involved in the claim or something, I could understand there being problems," she said. "But I'm the only living heir."
When contacted by CNNMoney, Michigan's unclaimed property administrator Gonzalo Llano said that if McGuire cannot provide paperwork linking her mother to the decades-old investment account, she can pay about $250 for a surety bond, which would protect the state from any liability if McGuire is not the rightful heir.
Carbone says the surety bond option seems completely unnecessary.
"It is so bizarre to take this 80-year-old woman and suggest she's a con artist," he said. "It's ridiculous."
"Unfortunately, there are always going to be these cases where it's not clean cut," said Beth Pearce, Vermont State Treasurer and the president of the National Association of Unclaimed Property Administrators."Our job is to make sure to get it to the rightful owner."
In 2011, states returned just $2.25 billion -- less than 6% of the total funds in state accounts -- to 2.5 million claimants.
While state's wait for owners to pop up, the unclaimed funds often serve as a major source of revenue.
In Delaware, unclaimed property has become "a vital element supporting the state's operating budget," according to a state budget document. The state expects to collect more than $500 million this year from banks and other corporations, compared to $71.1 million in the 1997 fiscal year.
Related: Celebrities' unclaimed cash: Obama, Zuckerberg and more
Unclaimed property collections are growing in other states, too. Many states are reducing the time in which funds are considered "dormant" and must be turned over, while some states are changing the standards so more funds will be considered inactive -- moves critics say are aimed at bolstering states' strained coffers.
Last year, Quebec resident Brahm Glickman decided to cash in on the shares of Apple (AAPL, Fortune 500) he bought through a stock broker in the mid 1980s and left "for a rainy day." With his daughter's wedding coming up and Apple's stock soaring above $500, the time was finally right.
But when Glickman called Compushare, Apple's transfer agent, he was told his 40 shares had been declared abandoned and turned over to the state of California in 2004. Glickman, who is a Canadian citizen and never lived in California, says he never received any notification.
When he contacted the California State Controller's Office, he learned that his shares had been sold by the state for a measly $1,500 -- tens of thousands of dollars less than they would have been worth last year. At the time, the state's unclaimed property division held onto stocks for only 30 days before selling them. The state now holds stocks for at least 18 months before they are sold.
Related: Unusual unclaimed property: $500,000 in diamonds, a can of sardines
"I thought having the actual shares in my safety deposit box meant they were mine and nobody could take them from me," he said. "It was just too unbelievable... after all these years, that they were worth absolutely nothing."
Jacob Roper, a spokesman for the California State Controller's office, which oversees unclaimed property, said that over the past five years, the state has increased its efforts to find and notify property owners, including cross referencing state tax records and other databases for addresses. California is now the only state to attempt to notify owners before their property is turned over.
It's unlikely these reforms could have helped Glickman, though, since his Canadian address would not have been found in state tax records, said his attorney Bill Palmer, who represented hundreds of clients in a class-action suit against California's unclaimed property program.
Palmer was able to help Glickman recover much of the value of his shares through an agreement with Apple and Compushare. Apple declined to comment. Compushare could not be reached for comment.
But Palmer says Glickman never would have gone through the ordeal in the first place if it weren't for the state's unclaimed property law.
"He spent a lot of time trying to fix all this," Palmer said. "He also had to pay an attorney, which he never should have had to."
First Published: March 5, 2013: 8:36 PM ET
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