Banking inactivity can eliminate an estate

In recent news there was a report of a man aged 88 years who died with an estate worth $2.42 million, accumulated from a frugal existence of saving all spare funds. His Will left his estate to his immediate family, though at his death none of the man’s family members were aware of his considerable wealth.

Amendments in December 2012 to banking laws meant that, because the deceased had not made a deposit or withdrawal on the account over the past 3 years, his bank automatically transferred his bank funds to “ASIC unclaimed money” as his account had been “inactive” (no withdrawals or deposits) for 3 years. ASIC is the Australian Securities and Investments Commission. Although there had been some bank fees deducted and interest received, such deduction of fees and crediting of interest is not considered “activity”.

After the unclaimed money is paid to ASIC, ASIC transfer it to Commonwealth consolidated revenue.

The unclaimed money can always be claimed back by the rightful owner even after it’s been transferred to the Commonwealth Government’s consolidated revenue. However, will a deceased’s Executors know to investigate and trace a deceased’s unclaimed funds?

There is no time limit within which a rightful owner must make a claim. From 1st July 2013, the Government will pay interest on the “unclaimed” amount held. But interest will be calculated only from 1st July, 2013 even if the money was held by the Government before that date.

To-date, in excess of one billion dollars has been transferred to “ASIC unclaimed money”, with the majority of that money coming from inactive bank accounts.

Prevention is always better than cure. Making even a $1.00 withdrawal or deposit once every 3 years constitutes banking “activity”, thereby keeping an account “active” and thus eliminating the automatic transfer of funds in the account to ASIC unclaimed money.

Is the Government holding your money?

You can go to www.moneysmart.gov.au to find out if there are “unclaimed” moneys in your name held by the Government.

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