Leonard's secret, lost millions

Written By Unknown on Minggu, 04 Agustus 2013 | 22.54

Leonard worked hard and saved diligently. Source: News Limited

THROUGH a lifetime of self-sacrifice, this humble carpenter amassed a secret seven-figure stash meant to benefit his children and theirs after he died.

Instead, the Federal Government has claimed the money through changes to lost-account rules.

At the time of his death last year, 88-year-old Leonard - his family asked that he be referred to by his first name only - had covertly accumulated an extraordinary $2.42 million. The hard way. There was no Lotto win. There was no inheritance.

Just scrimping - he serviced his 1992 Ford Laser himself until his passing. And saving - every spare cent of his Sydney Water Board wage was invested with care.

"He went without on a daily basis," said grandson Mark, who asked that his surname also be withheld.

Mark had no idea "Pop" was a millionaire miser. Nor did the rest of the family until after his passing.

Born in 1923, Leonard was raised in Redfern and served four years in the army during World War II. In 1942, he married Violet and together they raised six children in a Housing Commission property at Liverpool, in southwest Sydney. He died the owner of a single piece of real estate, his three-bedroom brick-veneer home, worth about $450,000, in the neighbouring working-class suburb of Bonnyrigg. His indulgence? Pigeon racing.

"He didn't fritter anything away,'' said daughter Janet, now one of the executors of his estate.

Leonard's exceptional wealth - and parsimony - have come to light as part of News Corp Australia's efforts to create awareness about Australia's rapidly growing pile of unclaimed money.

Leonard lived an ordinary Australian life, but built a small fortune. Source: News Limited

More than $1.2 billion is currently declared "lost'', including $816 million from bank accounts.

The largest of the 277,000 lost bank accounts now in the hands of the Australian Securities and Investments Commission is Leonard's. His family and its lawyer says ASIC shouldn't be anywhere near the money.

About $450 million worth of bank accounts - including Leonard's - only became "lost'' in May, after the government changed the rules. Previously, an account had to be inactive for seven years. Now it's three. The change netted Treasury additional revenue of $109 million.

"It's ridiculous," lawyer Ashley Smith said. "There would be hundreds of thousands of people who would have accounts that just sit there.''

Leonard's grandson Mark asked that banks consider adding a warning on statements once an account had been inactive for two years. Leonard had remained on top of his paperwork, Mark said, and with such a warning would have made a small transaction to ensure the account was not declared "lost''.

Australian Bankers' Association chief executive Steven Munchenberg said "the principle that they have raised is worthy'' - but it would not be put in place.

"It's the responsibility of the government to make sure that people are aware of this change," Mr Munchenberg said. "They are able to spend a lot of money advertising other policies but haven't been able to raise community awareness of this change."

ASIC said it concentrates on trying to reunite people with lost money. It said banks were supposed to warn customers to make a transaction.

Leonard's bank, St George, said it wrote to all customers with dormant accounts twice this year - three months before the May transfer date and again six weeks prior. But it could not comment on who it contacted regarding Leonard's account.

A spokesman for Bernie Ripoll, Parliamentary Secretary to the Treasurer, said the government's "reforms will help reunite Australians with their lost money sooner, and protect them from being eroded by fees, charges and inflation".

"It is far easier for people to track down lost bank accounts once they are transferred to ASIC and added to the online database at the moneysmart.gov.au website," Mr Ripoll's spokesman said.

Leonard's family sees it differently. If the seven-year rule was still in place the account would not have become lost in the first place.

Mr Ripoll's spokesman added that from last month, unclaimed money began earning interest at the rate of inflation.

"The unclaimed moneys system has been in place for well over half a century," the spokesman said, "and this will be the first time a government has ever paid interest on these accounts".

HOW LEONARD'S FORTUNE WAS LOST

Pre May 2010: Last transaction on Leonard's St George account, containing $2m+

July 2012: Leonard passes away

September: Leonard's family contacts St George

November: Government changes rules. Money now 'lost' after three years' inactivity, not seven

December: Family obtains probate

January 2013: Family sends St George documentation and instructions

February: Family follows up with St George after hearing nothing. Told some paperwork not received

March: Family re-submits paperwork; again St George says not received

May: Documentation submitted in-person at a branch May 22: St George automatically transfers Leonard's account to ASIC 'unclaimed' money

July: Bank acknowledges receipt of paperwork

HOW TO AVOID THIS HAPPENING TO YOU

Ensure you transact on all your accounts at least every two years and 11 months; moving $1 between accounts is all it takes

WHAT TO DO IF YOU THINK YOU HAVE UNCLAIMED MONEY

Check at ASIC's MoneySmart site: www.moneysmart.gov.au/tools-and-resources/find-unclaimed-money

If you do not have a computer or access to the internet you can ring ASIC on 1300 300 630

Got a problem? Contact John Rolfe via Twitter: @public_defender

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