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It’s the Big White Building With the Ionic Columns and the Statue of Alexander Hamilton . . .

An Exercise in Finding the Owners of Unclaimed Property One of the theoretical policy justifications for state unclaimed property laws is that the states will be conscientious about finding missing owners and reuniting them with their property. Indeed, according to the National Association of Unclaimed Property Administrators (an affiliate of the National Association of State Treasurers) the “purpose of unclaimed property laws is to protect consumers by ensuring money owed to them is returned to them, rather than remaining permanently with financial institutions, business associations, governments, and other entities.”   Given that premise, the identities of “lost” owners with property being held by the state never cease to amaze. Property is not just held for those truly “lost,” or famously reclusive authors , or politicians too busy to open mail , or those off in a galaxy far , far away . Some owners of unclaimed property are . . . ahem , presumably easier to fin

Nevada Passes 2016 Uniform Act Amendments

On June 7, 2019, Nevada Governor Steve Sisolak approved Senate Bill 44 which incorporates certain provisions of the 2016 Uniform Unclaimed Property Act into the Nevada Unclaimed Property Act. In particular, the new legislation adds provisions relating specifically to payroll cards and virtual currency and exempts game-related digital content and loyalty cards. It also changes the dormancy standards for life insurance policies and IRA accounts to more closely mirror the provisions of the Uniform Act and allows for the use of electronic communications. With regard to owner claims, the new law expressly permits the state to deduct from such claims and amounts owed by the owner for outstanding child support, civil or criminal penalties, or state and local taxes. In an effort to combat fraudulent claims made for unclaimed property, the new legislation also imposes criminal penalties for the filing of false claims. The new law goes into effect on July 1.

Colorado Passes Version of 2016 Uniform Unclaimed Property Act

New Legislation, Which Reduces Many Dormancy Periods To 3 Years, Is Effective July 1, 2020   On April 16, 2019, Colorado Governor Jared S. Polis signed Senate Bill 19-088 into law, which adopts a version of the 2016 Uniform Unclaimed Property Act. Under the new law, the dormancy period for most property types will drop to 3 years (down from 5). Certain bank accounts and gift cards will still be subject to a 5 year dormancy period, and other items like payroll and dissolution proceeds will continue to have a 1 year dormancy period. With respect to securities, the new legislation imposes a 3 year dormancy period, that now begins to run upon the second instance of returned mail (as opposed to the former unclaimed dividend standard). The new law also leaves in place certain Colorado-specific exemptions that were in the prior Unclaimed Property Act, such as the exemption for certain lawyer trust accounts, gaming chips or tokens, property held by racetracks, and certain

Is "True Escheat" The Future of Unclaimed Property?

Nevada is considering a bill "providing that all property rights and legal title to, and ownership of" of U.S. savings bonds would "vest in this State" after three years. After that three year period, the state could choose to pay the proceeds to the rightful owner of the bond, but the decision to do so would be left to the state's discretion. West Virginia is considering similar legislation , A law proposed in Hawaii goes even further providing that all unclaimed property with a value of $100 or less shall immediately "escheat to the State and be transferred to the general fund." These are just a few examples of a new (and for unclaimed property owners, troubling) trend in unclaimed property legislation -- a shift from "custodial" escheat laws to "true" escheat laws. Currently, most state unclaimed property laws are "custodial" in nature -- meaning that the state takes possession of the unclaimed property on t

Arkansas Passes Law For Immediate Liquidation of Unclaimed Securities

Recently, we posted an article addressing the potential pitfalls to owners arising out of certain state's treatment of "unclaimed" securities account. In that article, we noted a bill pending in Arkansas legislature permitting the Administrator of unclaimed property in that state to sell escheated securities immediately upon receipt, instead of holding them for three years. That bill became recently became law. The new law was also passed as an emergency measure meaning that the legislature made a determination that this new law was "immediately necessary for the preservation of the public peace, health, and safety." Accordingly, the law became effective immediately upon its approval by the Governor on March 15. Assuming that the state begins the practice of immediately selling securities reported to the state, it means that owners who later seek to recover their property from the state will not receive the securities -- nor any of the divid

Friday Lost + Found

IRS Holding $1.4B in Unclaimed Refunds -- According to CBS News the Internal Revenue Service has announced that it has approximately $1.4 billion in unclaimed tax returns for more than a million taxpayers. In addition to background on how these amounts have gone unclaimed, the article also has some tips for those who may have fallen behind on filings. California Holding Over $9 Billion in Unclaimed Property -- From time to time, states will publish estimates of the approximate amount of unclaimed funds being held at a given time. According to a recent press release from the California State Controller's Office , the Golden State holds over $9 billion dollars in unclaimed funds waiting for its rightful owners.   Former Mutual Fund Employee Convicted of Stealing from Dormant Accounts -- Whenever any organization has a cache of dormant or otherwise unclaimed funds lying around (so to speak) there will be those who see the potential to take some of that money for themselve

Friday Lost + Found

A Roundup of Odds & Ends From the Week in Unclaimed Property GAO Issues Report on Unclaimed 401(k) Funds -- The Government Accountability Office, which is responsible for providing recommendations to Congress on the responsibilities of the federal government, recently issued a report concerning the application state unclaimed property laws to retirement assets such as 401(k)s. In preparing the report, GAO sent questionnaires to the unclaimed property offices of all 50 states, interviewed industry representatives, and surveyed fund and brokerage firms on their handling of these items. Among the GAO's recommendations are that the IRS clarify the tax treatment of plans that are escheated to the state and consider allowing taxpayers whose later claim assets that were unknowingly escheated to rollover the assets into a qualified plan. Claim Headaches -- One of the benefits of modern escheat laws is that they are generally "custodial" in nature -- meaning that th

Britons Blindsided by U.S. Escheat Laws

Jessica Gorst-Williams, the "Agony Aunt" of U.K. newspaper The Telegraph recently ran an help column relating to a U.K. resident's complaint that her shares were escheated to the State of Delaware without her knowledge. Accordingly to the unlucky shareholder, her shares were turned over to the state " because I had not made any contact with the company since receiving the shares, the necessity of which I had no prior knowledge."  Ultimately, the shareholder had to submit her driver's license, passport, bus pass (seriously), as well as a copy of the actual stock certificate. After jumping through these hoops, did our heroine across the pond get her stock back? Not exactly. Instead, she got a check for $1, as the state had already liquidated the stock without her consent at the then-market value. This story is far from unique. Every year, certain states require broker/dealer firms to turn over stock positions, which are in many cases summarily liq

Friday Lost + Found

Ohio Oops -- The Ohio Division of Unclaimed Funds recently issued 1099 tax forms to those individuals who claimed abandoned property from the state during the prior year. Unfortunately, i t appears that many of the forms were not sent to the correct individuals . Those who may be affected are encouraged to c ontact the Division of Unclaimed Funds for more information and a free year of identity theft protection. Municipal Unclaimed Funds -- While we focus most of our attention on unclaimed property held by state governments, municipalities and counties may also hold unclaimed property. A municipal or county government may be holding payment refunds, jury service checks, or deposit refunds for rightful owners who have not claimed those amounts. For example, CBS 58 in Milwaukee report s that Milwaukee County is holding more than $2.2 million in unclaimed funds for its residents and business partners. 2016 Uniform Act News -- The Revised Uniform Unclaimed Property Act wa