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Showing posts from March, 2019

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