In January 2014, Kansas became the first state to cash abandoned U.S. Treasury bonds in its possession, starting a gold rush of sorts of state claims to bonds that have been found and some that haven’t.
The Kansas state treasurer received $861,908 from the U.S. Treasury for the matured bonds found in unclaimed safe-deposit boxes.
“Previously, all attempts made by any state to claim U.S. savings bonds under various unclaimed property acts were denied due to a lack to legal title to the bonds,” Treasurer Ron Estes announced in a news release.
Prior to 2000, Kansas’ unclaimed property statute allowed the state to take custody of, but not title to, such property. In 2000, the Kansas State Legislature, however, amended the statute specifically to allow the state to take title to the unclaimed U.S. savings bonds.
Arkansas passed a similar law last year.
There are two categories of unclaimed savings bonds. The first category is the abandoned paper bonds that have ended up in state possession. Those are the type Kansas was successful in cashing.
It is the second category of bonds that has really piqued the interest of attorneys and more than a dozen state governments. Those are unredeemed bonds — lost, stolen, destroyed or otherwise unavailable — that are referred to as “absent bonds.” The total value of those absent bonds at the Treasury is estimated at $17 billion.
The Treasury has historic information about ownership of the absent bonds but has rejected requests for lists of bonds whose owners’ last known addresses were in a specific state. Some are decades old and include war bonds sold to soldiers who were then killed in action without telling their heirs about the purchases.
The Treasury has argued that under its regulations it “is bound to its contract with the registered owner of these [absent] savings bonds, and would violate that contract if it redeemed them to a third party,” according to an Aug. 15 order from Judge Elaine Kaplan in the U.S. Court of Federal Claims.
Jonathan Compretta is an attorney at the Mike Moore Law Firm of Flowood, Mississippi, which works with a group of attorneys on behalf of states to get title to the unclaimed savings bonds. He said the goal of their work is to reunite the bonds with their owners or heirs.
“The whole issue is trying to get the list of bond owners in the various states,” said Compretta, who worked to get legislation passed that would allow Arkansas to pursue the bonds. “This effort is about finding the people who bought the bonds, or who the bonds were bought for, and trying to get them back to them.”
Kansas’ treasurer, successful in getting title to abandoned bonds, continues to fight to get absent bonds. The case is in the U.S. Court of Federal Claims and in the early stages of discovery.
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