Another potential revenue source for regional homeless funding is unclaimed property, including unclaimed decedents’ estates. California Law distinguishes between unclaimed property in general and estates of people who die without known heirs or whose heirs cannot be located.

Unclaimed Property

Each year a substantial amount of property (both money and tangible property) is "unclaimed." California has adopted a variation of the Uniform Disposition of Unclaimed Property Act of 1959. California’s procedures are governed by the California Unclaimed Property law,^[47] and Unclaimed Property Regulations.^[48] Other States have similar statutes based on model legislation drafted by the Commission on Uniform State Laws.

Unclaimed property includes savings accounts, checking accounts, stocks, dividends, wages, certificates of deposit, insurance policy proceeds, benefit plan disbursements, insurance rebates, refunded utility charges, the contents of safety deposit boxes, and many other types of property. Such property typically becomes "unclaimed" because people forget about it and move away or die and the institution holding funds or tangible assets cannot track them.

In California unclaimed property goes to the State if the last known address of the apparent owner was in California, there has been no activity regarding the property for a specified period of time, and the apparent owner cannot be located. The amount of time property must remain "inactive" varies for different types of property. For example it is three years for savings deposits, contents of safety deposit boxes, and life insurance policy proceeds where the policy has matured or terminated. It is five years for checks, seven for money orders, and fifteen for uncashed travelers checks.

By law unclaimed property must be transferred to the State directly by the holders of the property-banks, insurance companies, pension funds, etc. It does not go through city or county government first. The State assumes custody and becomes responsible for the safekeeping of the property.

Unclaimed property is managed by the Bureau of Unclaimed Property (BUP) within the California Controller’s Office. The function of this office is to provide a one-stop location where people seeking unclaimed property can search for it and to manage the legal disposition of the property efficiently. With responsibility for more than $2.4 billion in more than 6.9 million separate accounts, the BUP has a large staff of lawyers, accountants, and other professionals. Much of the bureau’s work involves working with individuals, organizations, and probate lawyers searching for unclaimed property. The BUP maintains a website where individuals and their representatives can search for property they believe may belong to them.

Unclaimed property does not permanently escheat to the State.^[49] It is held in an expendable trust for the benefit of the residents of the State.

Estates With No Known Heirs

The California Probate Code  and the California Code of Civil Procedure  provide for disposition of unclaimed estates.^[50] Unlike unclaimed property, unclaimed estates permanently escheat to the state. Rules about how long estate property must be held and the notice and other legal procedures required before the property escheats differ depending on the amount of the estate and whether or not there are named heirs.

The California Probate Code  provides that if there is no one other than a government or governmental subdivision or agency to take the estate of California decedents by intestate succession, the property escheats to the State at the time of the decedent’s death.^[51] This is true of real property such as land and houses, personal property such as cash, cars, and furniture, and intangible property such as the right to royalties.^[52] Insofar as practicable real or tangible personal property is converted to money before distribution to the State.^[53]

Estate property that remains unclaimed because it is refused by named or known beneficiar(ies) or where the beneficiar(ies) are known but cannot be located is deposited with the county treasurer. The treasurer holds the property for one year and thereafter distributes it to the State.^[54] After five years the California attorney generals office brings a court action to escheat the property. The property is held for an additional five years before the escheat is finalized. At that point the property belongs to the state and noone can claim an interest in it.

A small amount of unclaimed estate funds  is earmarked for a special purpose. Very small amounts of unclaimed estate funds are deposited in the State School Land Fund.^[55] There is no comparable provision regarding disposition of very small amounts of unclaimed property.

California law makes special provision for the disposition of unclaimed money or other property belonging to people who die while confined in state penal, mental, or youth institutions.^[56] California law makes no special provision for the disposition of unclaimed money or other property of people who die in homeless shelters.

There is a weak nexus between most unclaimed property and homelessness. Unlike park fees, traffic tickets, or transient occupancy fees these funds do not come from a specific type of activity that suggests they should be returned to support parks, traffic improvements, or tourism. The nexus between certain kinds of unclaimed property and homelessness is much stronger. Arguments for using unclaimed property from people who die in state penal institutions to support programs for homeless prisoners, property from people who die in state mental institutions for mentally ill people in supportive housing programs, and property of people who die in state youth institutions for programs for homeless youth are quite compelling.

Pursuing unclaimed property has the virtue of simplicity. It requires dealing with the State rather than multiple local jurisdictions.

This is a substantial revenue source. According to the Comptroller California received $139,397,000 in unclaimed property in the fiscal year ending June 30, 1998.^[57] The State of California currently holds more than $2.4 billion in unclaimed property. Since unclaimed property is retained in a State fund in perpetuity the amount cumulates. Obtaining a claim to a portion of the interest on this funding would be the functional equivalent of getting an ever-increasing endowment. The revenue stream should increase in a reasonably predictable way.  The base fund amount is known and the amount of yearly interest is predictable. The amount of property which escheats each year should grow as the population grows with some variation around a constantly increasing average.

Getting State unclaimed property funds dedicated to regional homeless programs would require State level advocacy, including new legislation. Homeless organizations would face forces of tradition in trying to change use of existing fund proceeds. A uniform State level change allocating all  of the State unclaimed property fund to homelessness is unrealistic given the amount of money involved. A campaign to receive a portion of the interest accumulating in the account would still face formidable barriers. Assuming an 8% return, just the annual interest on California’s $2.4 billion unclaimed property fund would amount to $192 million statewide. Getting any of this money allocated to regional or other homeless programs would be difficult given the State interest in use of the funds at the State level, the long-standing existing system, and consistency with the policy of other States. Critics would certainly oppose any earmarking of flexible funds. They would ask: "why earmark at all?", "why for homelessness?", and "why for regional homeless needs?"

A strategy to have unclaimed property of people who die in state penal, mental, or youth institutions devoted to homeless people with characteristics similar to the decedents has a higher probability of success. This would produce much less funding for regional homeless programs than obtaining a significant part of all  state unclaimed property or unclaimed estate funds. But less money at issue would reduce the political opposition to earmarking.

The nexus between these sources and homeless needs is much clearer. Unclaimed property from people who die in State youth institutions is one logical long-term source of support for BARI’s Homeless Youth 101 project or county- or city- level homeless youth programs. Unclaimed property from people who die in State mental institutions is one logical long-term source to support BARI’s Health, Housing, and Integrated Services Network or related local programs. Unclaimed property from people who die in State penal institutions has a less clear match with any existing BARI program, but could be related to programs to house, train, and/or provide social services for homeless ex-offenders.

Another possible strategy, based on the success of education advocates in getting a small amount of residual money from unclaimed estates dedicated to the State School Land Fund, might be to propose a new section of the California Unclaimed Property Law  parallel to CCP s. 1444.5 which provides for disposition of residual amounts of unclaimed estate  funds. Such a law might specify that small amounts of unclaimed property  be deposited in a fund for the homeless. Small amounts of money  such as a safety deposit box with $10 in cash, a single $8 PG&E refund, or a savings account with a $20 balance represent an accounting irritation for the state. Disposing of these residual funds might be politically acceptable, in part because the cost of disposing of them in more complex ways may exceed the revenue the state receives. It is difficult to estimate how much revenue such a law might produce. The amount depends in part on the threshold set. Cumulatively this could represent a significant source of homeless funding.

Recommendation

Homeless organizations should consider campaign(s) to obtain new legislation which would allocate unclaimed money or other property of people who die in State penal, mental, or youth institutions to fund(s) to benefit homeless people related to the decedents such as homeless ex-convicts, mentally ill people in supportive housing projects, and homeless youth. BARI should also consider a campaign to obtain new legislation to get unclaimed property which becomes available in small amounts for homeless people.

Whether or not homeless organizations pursue a broader campaign to obtain some unclaimed property or unclaimed estate proceeds for homeless people might await the outcome of these more limited initial efforts.