Buried treasure: Unclaimed Cayman assets

State and federal governments around the world are estimated to hold somewhere in the region of $60 billion to $100 billion of unclaimed assets or dormant accounts. Included in these sums are assets belonging to Cayman businesses, individuals and the Cayman Islands government. We explore how these assets came to be and what steps can be made to return them to their rightful owners.

Unclaimed assets can be anything from a long forgotten bank account opened when you were in college, to a reissued check that a business failed to collect on when it changed locations. A large corporation might have written off balances that initially appeared uncollectable, or a company may have lost track of some financial assets either when moving offices from one location or jurisdiction to another, or when they ceased operations.

Perhaps an elderly widow didn’t realize her husband had bought a life insurance policy or had opened a brokerage account, or an heir moved before an estate was settled. These are just a few examples of situations that could result in an unclaimed asset. All it takes is one undocumented move, a simple address error, or a postal delivery problem for the money to become lost to its rightful owner, potentially forever.

These unclaimed assets would typically be held by private companies, such as banks, insurance companies, brokerages or retailers. Governments around the world have introduced dormant account or unclaimed property laws which require these dormant assets to be turned over to them to ensure that the assets are protected and the rightful owner has the means to recover the assets.  Governments have also identified that in many cases these assets are a potential source of working capital for them.  Because of the quantum involved, some governments have been more assertive than others in identifying these assets and requiring those assets be transferred to them. Many governments around the world are able to use the hundreds of millions of dollars received annually from the transfer of dormant assets from accounts in their jurisdiction.

While governments with dormant account laws are generally obligated to publish lists of the assets to provide owners the means to locate and claim their assets, knowing where to find your asset and how to claim it is not always easy or straightforward.

Many people might know that the Cayman Islands enacted the Dormant Accounts Law, 2010 in July 2010, requiring banks operating in the Cayman Islands to transfer dormant accounts to the Cayman Islands government, which can then easily be claimed locally.  But what they do not know is that there are also millions of dollars belonging to Cayman residents and companies that became dormant when being held by foreign financial institutions outside of Cayman and have since been transferred to governments in the U.S., Canada, the UK, and other countries around the world. The problem with recovering this money is that in many cases a simple typographical error on the part of a foreign bank branch, insurance company or brokerage firm could make that money almost impossible to find. There are many places where your unclaimed financial assets could be held, few of which are easily accessible.

These include numerous locations outside of Cayman – often in databases or publications that may not even be available online.

Consider the scenario where a person had an insurance refund check that was not claimed. The check may have been drawn on a bank in New York, from an insurance company that you did business with in Houston, which is a branch of a Delaware incorporated entity.

Where do you look to claim the asset?  In New York, Texas or Delaware, also assuming you know what asset hasn’t been claimed.

What most people aren’t aware of is that no international legislation or single governing body exists to capture the details of dormant and unclaimed life insurance policies, savings bonds, bank accounts, pensions, mutual funds, brokerage accounts, income tax refunds, credit union accounts or old stocks and bonds.

To locate an asset held by the U.S. government would mean checking all 50 states, which all use different means of collecting and publishing the information, as well as using different claim forms to seek to reclaim the assets. With no publicly accessible and comprehensive registry of these unclaimed funds, it is incredibly difficult and time consuming for the average person to search for lost funds.  Most wouldn’t even know where to start, and when they do, it could take months or years of research to locate and gain access to the hundreds of company or government databases around the world.

This is a particularly challenging issue for an executor of a deceased person’s estate who has a duty of care to the beneficiaries named in a last will and testament. It can be very difficult to locate and recover the variety of financial assets from numerous sources and jurisdictions that may belong to the estate. It is a reality that many people die without having organized their financial affairs and many without even having prepared a will, which leads to significant challenges for executors and the next of kin to identify and collect the assets of the deceased.

In addition, unique to the Cayman Islands is the fact that the ISO country code KY, which is part of the Cayman Islands postal code system and is followed by five numeric digits, appears very similar to a U.S. address in Kentucky, which shares KY as a U.S. state code followed by a five-digit postal ZIP code. A further complication is that there is a city in Kentucky with the name of Georgetown, which has a population similar to George Town, Grand Cayman.  Few Americans include “USA” when providing their address, so the common tendency for U.S. asset holders is to assume that the asset owner is in the United States rather than the Cayman Islands. Human error is one of the leading causes of assets becoming lost and dormant and is one of the major challenges for AssetMine in compiling a comprehensive global database of all known unclaimed assets seized by governments around the world.

An obvious question is: Why hasn’t someone contacted me about this before? The truth is that institutional holders of dormant or unclaimed assets have little incentive to find the rightful owners.  Companies and foreign governments are actually benefiting from the ability to hold on to these funds belonging to owners in other countries and to recognize them as operating cash on their balance sheets and in their budgets. In some cases the holder of the money may have made a minimal attempt to contact the rightful owner. If the rightful owner has moved or changed phone numbers, the company will often not go any further to identify them or track them down.  There is rarely any motivation for the holder of the asset to look any further and the legal requirements to do so are often minimal. In many cases the only reason these assets are seeing the light of day is because the government has dictated that the assets now be transferred to them.

For people who are eager to find their treasure, there are really two means of doing this. One is to visit the more than 100 state, provincial and federal government websites that give notice of the dormant and unclaimed assets, locate the asset and file a claim for it.

Alternatively, you can find one of the few entities that has collected this information already and have them search their database for assets and file claims on your behalf, and for a small fee recover the assets for you.