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Showing posts from 2017

Reminder: Deadline Approaching for Holders to Convert Delaware Audits to VDA

As we noted earlier , Delaware legislation passed October 1 (effective October 11) commenced a 60 day period during which some holders undergoing Delaware unclaimed property audits have the option of converting that audit to a Voluntary Disclosure Agreement .  Unlike a traditional unclaimed property audit, in the VDA program a holder completes a self-review of its records and reports those items believed to be in scope.  In return for this remittance, the Secretary of State agrees to waive the interest and penalties that could otherwise be assessed the holder for noncompliance.  Note that while the VDA program offers a holder more autonomy and control over the review process, the holder's ultimate report, methodology and remittance are subject to approval by the Secretary of State's office. According to the Delaware Secretary of State's website, any holder currently under audit that received a notice of examination from the State Escheator on or before July 22, 2015, ex

Delaware Adopts New Unclaimed Property Audit Regulations, Starting 60 Day Audit Conversion Clock for Some Holders

On October 1, 2017, the Delaware Department of Finance issued long-awaited unclaimed property regulations , effective October 11.   The new regulations continue the overhaul of the State's unclaimed property program and provide numerous and detailed instructions to both holders and auditors relating to unclaimed property audits.  The regulations specify, among other things, the State's process for initiating and audit, the process of information requests and inquiries by the auditors, and specific guidelines on the use of estimation.  The guidelines also address a number of substantive issues of interest in the normal reporting process, such as: a specification of records to be maintained by the holder in the ordinary course of business; details on calculating the "maximum cost to the issuer" associated with gift-card or stored value instrument that must be escheated to the state; specifications concerning what activities do, or do not, constitute "owner acti

Utah Passes Version of 2016 Uniform Unclaimed Property Act

It has been about nine months since the National Conference of Commissioners on Uniform State Laws approved the 2016 Uniform Unclaimed Property Act and recommended it for adoption.  A number of 2016 Uniform Act bills, or state variants thereof, are now working their way through state legislatures; some are crossing or nearing the finish line. On March 24, 2017, the Governor of Utah signed Senate Bill 175 into law.  This legislation repeals and reenacts the state Unclaimed Property Act, adopting most (but not all) of the provisions of the 2016 Uniform Act.  While the new law does not change the dormancy period for most items, it does incorporate many of the Uniform Act's structural and procedural changes, including the establishment of a formalized audit appeal procedure, detailed provisions relating to confidentiality, and rules relating to the reporting and remittance of unclaimed life insurance policies.  At the same time, Utah kept some of its state-specific dif

Pennsylvania Issues Guidance on Revised IRA Provision, Delays Impact

Last fall, Pennsylvania amended its unclaimed property law to, among other things,  change the ways that Individual Retirement Accounts (IRAs) are covered by the Act.  Under the former law, IRAs were not required to be turned over to the state unless there was an unclaimed distribution or the IRA owner reached the mandatory distribution date specified by the IRS rules.  Under the revised law, the dormancy period begins to run when two account statements are returned to the custodian as undeliverable.  In other words, if a person moves, but forgets to tell his or her IRA custodian within the period of two account statements, the IRA account is on its way to being turned over to the Commonwealth. As noted in an earlier post , this approach is potentially problematic.  IRA's are perhaps the predominant "buy and hold" type of investment.  Not only are they designed to provide preferable tax treatment in exchange for holding until a later age, but there are ac

Update: Delaware Senate Bill 13 Enacted, Effective Immediately

Following up on Delaware Senate Bill 13 , the legislation was signed by the governor last week, and is effective immediately.

Proposed Delaware Legislation on the Fast Track

The unclaimed property community is abuzz regarding new legislation in Delaware that is being touted as a fix for the numerous deficiencies and questionable practices that a federal court  vigorously criticized last summer.  The new legislation --  Senate Bill 13 -- is intended to fix the problems identified by U.S. District Court Judge Gregory M. Sleet in  Temple Inland v. Cook , as well as to adopt some of the new proposals set forth in the  Revised 2016 Uniform Unclaimed Property Act . Among some of the highlights of the proposed legislation include: a uniform due diligence requirement; more clarity on what information constitutes a last-known address; notice to the owner by the State Escheator for certain types of property; clearer standards for determining when a debt has been discharged; a 10 year record retention provision; While these are all welcomed potential developments, what really has the unclaimed property community intrigued are the provisions relating to a