Recently, the State of New York, Office of the State Comptroller, unilaterally enacted a policy that has had a tremendous negative impact on unclaimed property claimants that are trying to recover unclaimed money left behind by deceased relatives.
New York State has a statute that allows money being held in the name of a deceased individual to be claimed by next of kin if the value does not exceed $15,000; by simply signing an affidavit. Appropriately, it was named the SMALL ESTATE AFFIDAVIT. It is a simple way to allow smaller sums of money to pass from the deceased to their living heirs without the unnecessary complexities and expenses of a probate proceeding.
Designed for the very purpose of simplifying the process, and enacted by legislation, the State has elected to no longer accept the small estate affidavit for deceased unclaimed funds claims.
Neither a surviving spouse, nor a child, will be able to simply collect money from the State. Now they must file a petition with the Surrogate’s Court in the county where the deceased owner lived. The petition has to be properly completed and must be filed with a variety of documents depending upon the county and clerk in that county; Paid funeral bill, certified death certificate, affidavits of heirship and/or delay, inventories, etc….
Also, required - an EIN for the Estate. Yes, you have to apply for a tax ID for the Estate with the IRS too. And the funds get paid out to the Estate, not the next of kin….
The State has told us that they can no longer honor small estate affidavits because too many people were claiming money without making full disclosures about the entitled people; despite indemnifying the State against improper payouts.
There are so many things wrong about this policy change, but the bottom line is that more people will give up on their claims (its already at 50%), and it will no longer be financial viability to claim smaller amounts of money (over 75% of all accounts).
So the question is:
Was the policy really enacted so the State could keep more money, because that is what the result is going to be…..
Over $15 billion and growing…