Court Ruled Michigan Cannot Seize Abandoned Property
A federal appellate court decision clarifies that you retain ownership of funds held by the state as unclaimed property.
Updated on Oct. 5, 2026 in Saving
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Should owners retain full legal rights to their property after the state takes custody of it?
A federal appellate court has vacated a district court's dismissal of a due-process lawsuit brought by Dennis O'Connor against Michigan regarding unclaimed financial accounts. The ruling establishes that original owners maintain ownership of their property even after the state takes custody under the Uniform Unclaimed Property Act.
Why it matters
This legal outcome protects the property rights of residents whose assets were transferred to the state's general fund after private companies lost contact with them. By determining that the state does not acquire ownership of the principal, the court safeguards assets for individuals attempting to reclaim their accounts.
Dennis O'Connor held two separate financial accounts, one valued at less than $100 and another between $100 and $250, which were deposited into the state's general fund. The court's decision confirms that the state's custody does not equate to a transfer of ownership of these principals.
The players
Dennis O'Connor
An individual who challenged the state's handling of his unclaimed financial accounts in federal court.
Michigan
The state government that takes custody of dormant financial property and deposits the funds into its general fund.
The details
Under the Uniform Unclaimed Property Act, private companies are required to turn over dormant financial accounts to the state after losing contact with the owner. The state then places these funds into its general fund until a claim is made. The appellate court found that the initial district court made a threshold error by suggesting the state could take ownership of the underlying principal of these accounts during this custody process.
Timeline
October 29, 2024: Kemerer v. State decision issued by Michigan Court of Appeals.
2025: Appeal of Kemerer v. State denied.
October 4, 2026: Appellate court vacated district court dismissal.
Money Landscape
This decision limits the reach of the Uniform Unclaimed Property Act by distinguishing between state custody of dormant assets and permanent state ownership. It marks a departure from interpretations that previously treated property held in the state's general fund as effectively surrendered.
If you suspect you have unclaimed property in Michigan, this ruling supports your ongoing right to reclaim those funds regardless of how long the state has held them in its general fund. You should periodically check official state databases for lost accounts and consult with a professional regarding potential recovery.
The takeaway
The court has affirmed that your financial assets remain your property even when they are held by the state as unclaimed funds. Review your records for any lost accounts and consider checking the state's official unclaimed property website for any assets listed in your name.
Further reading
Learn more about managing your assets in our Saving section.
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Should owners retain full legal rights to their property after the state takes custody of it?
