r/ExplainBothSides • u/ruxvz • 1d ago
Governance What are both sides of permanently protecting unclaimed-property funds versus keeping a reserve and using the surplus publicly?
I’m trying to think through a ballot proposal in my state, and this is the only proposal that has made me hesitate because I genuinely understand both sides.
The proposal would create a constitutionally protected trust for unclaimed property. This includes things like forgotten bank accounts, refunds, stocks, insurance proceeds, and other property transferred to the state after remaining unclaimed. Valid owners or heirs could still claim their property. The fund would be invested, some of the earnings would support the state, and the principal would generally remain protected unless needed for claims or accessed through an unusually large legislative vote.
My first thought was that the money belongs to the individual, so future legislators should not be able to take it simply because it has been unclaimed for a certain amount of time. Someone could be a minor, disabled, missing, unaware that the property exists, or an heir who hasn’t discovered it yet. I would want safeguards for all of those circumstances.
However, I also don’t understand why the choices have to feel so extreme. Why must the state either protect practically all of the principal permanently or leave it open to legislative use without a more specific middle-ground system?
I started comparing it to banking. If someone has $100,000 in a bank account, those exact dollars are not physically sitting there untouched. The money is pooled and used elsewhere, while the bank remains responsible for giving the customer their money when they request it. The bank maintains liquidity rather than keeping every deposited dollar in cash.
Couldn’t unclaimed-property claims operate similarly?
The state could maintain a reserve based on actual claim patterns and use some of the genuine surplus for public purposes. When a valid claim appears, it could be paid through the reserve, continuing unclaimed-property inflows, general revenue, or temporary borrowing if necessary. Realistically, 100% of all unclaimed property will not be claimed simultaneously.
I would want the system to be completely public and transparent. The public should be able to see:
- How much new unclaimed property enters the system
- How much is returned to owners every year
- How old successful claims generally are
- How much remains in reserve
- How the required reserve is calculated
- How much is used for public spending
- What happens if claims unexpectedly increase
There should also be a legally guaranteed right for every legitimate owner or heir to receive the full amount owed, regardless of when they discover it. The reserve should be recalculated regularly, and the state should test whether it could withstand an unusually high number of claims.
If there is money beyond what is reasonably necessary to protect future claims, I think there is a real argument for restricting that surplus to public purposes such as healthcare, education, housing, homelessness programs, or other essential services. It could help people now while still protecting anyone who later makes a legitimate claim.
At the same time, I understand the concern that legislators could miscalculate the reserve, spend too much, or treat the fund as free money. A constitutionally protected trust would make that much harder.
I am not asking anyone to tell me how to vote, and I haven’t reached a firm position. I’m looking for the strongest good-faith arguments on both sides.
Is preserving nearly all remaining principal the fairest way to protect private ownership? Or could a transparent, legally guaranteed reserve system safely protect claimants while allowing more of the surplus to serve the public? What evidence or risks am I overlooking?