Abandoned or Unclaimed Property
A "fixed and certain” interest in intangible personal
(or physical, in the case of safekeeping items) that is held, issued or owing
in the ordinary course of business and has remained unclaimed by the apparent
owner for a statutorily defined period of time after it became payable or
An action by the property owner that "restarts" the applicable state
dormancy period, under the laws of the relevant jurisdiction. For example, if
the owner makes a deposit to his bank account this is considered "owner
generated activity” and is sufficient to "restart" the dormancy
The dollar amount specified in some state laws or
regulations under which the holder is not required to report owner/address and
is permitted to group such item by property type and report the total of that
grouping under the applicable property type code. However, some states may
request or require that the owner/address detail information to be appended to
the report, if it is available.
A voluntary compliance program offered by state governments
from time to time that allows holders to report and remit overdue unclaimed
property while limiting or in some cases eliminating the potential liability of
penalties and/or interest. Amnesty is an attempt to encourage holders,
especially first time filers, to report unclaimed funds.
The owner of unclaimed property according to the books and
records of the holder.
The process by which an owner of unclaimed property can
recover the property. This term is sometimes used to mean the retrieval of
property by businesses of property belonging to them.
Asset or Heir Finders
Individuals or businesses that offer to reunite the apparent
owner or heirs with unclaimed property for a fee, sometimes referred to as
"Locators”. This reunification can happen either before or after escheat
A dormancy period is a specified period of time in which the
property owner does not take action on his or her property. The dormancy
period, also known as the abandonment period or escheat period, begins on the
date of last activity by the owner. The duration of dormancy periods varies
depending upon the property type.
Some states' laws require bifurcated reporting. In these
instances, holders need to file an initial report, sometimes referred to as a
publication report or a notice report. This report lists the names and
addresses of individuals for which the holder has property that is presumed
abandoned. The states may use the information in the "initial report” to
publish or give notice to the listed owners within a defined time period. At a
specified subsequent date, the holder is required to file a final or remittance
report listing any property that remains unclaimed and to remit the property to
the appropriate jurisdiction.
Due Diligence (Statutory/Regulatory)
The state mandated owner outreach to reunite owners with
property. Unclaimed property laws or administrative rules typically specify the
timing for and type of the notification. Some states require specific language;
information and font requirements related to mandated correspondence and may
have additional requirements such as certified mailing.
Due Diligence or Minimum
The dollar limit over which a state mandated due diligence
letters are required to be sent to the apparent owner.
The transferring or remitting of abandoned or unclaimed
property to the appropriate state in accordance with its unclaimed property
laws. The term commonly refers to the general process of reporting and
remitting unclaimed property to states.
The business or other entity, which holds inactive property,
that is payable or distributable to another.
Due Diligence Offset/Deduction
Certain states will allow holders to deduct the expenses or
a portion of the expense of due diligence mailings. This is accomplished by
deducting the expenses from the amount remitted. When available, it is not
required to take these deductions, but they can be useful in defraying some of
the costs of compliance.
Holder ID Number
Also can be referred to as State ID or Holder Number, this
is a state specific unique identification number issued by some states to
identify holders of unclaimed property that have previously filed in their
state. This Identification number will typically need to be included on each
subsequent filing with that state. States often use this number as a means to
determine if a holder is filing reports and if they are filed timely, etc.
1. A holder's right to be protected against claims from
customers (or other states) if the holder reports property in good faith
according to the process set forth in the state's unclaimed property laws or
a holder is the subject of a state examination/audit, the state will typically
indemnify the holder against future exams and penalties related to the audit
time period and for property types that are within the audit time period.
Intangible Personal Property
Property, such as stock, that is not in physical form. Stock
certificates, for example, represent ownership interest in a company.
Last Activity Date
The date of last owner-generated activity; for example, the
last activity date can be date of check issuance or the date of last documented
contact with an account owner, such as a customer making a deposit to a bank
account. This date is used to determine the when the dormancy period begins to
Last Known Address
The address of record for an owner of unclaimed property, as
identified on the holder's books and records.
NAICS & SIC Codes
North American Industry Classification System codes (NAICS)
and Standard Industry Codes (SIC) are often required information on state
unclaimed property reports. These codes specify what type of business in which
a holder is engaged.
National Association of Unclaimed Property Administrators (NAUPA) is
the trade association comprised of state unclaimed property officials.
NAUPA II Standard Electronic File Format
This is the standard file format for electronic unclaimed
NAUPA Holder Claim Form/Holder Reimbursement Form
Uniform holder claim form for holders to obtain funds
remitted in error or paid to the owner after escheatment.
Also called a "zero” property report is a report
stating the holder has no property to report for the filing period. Some states
and some by states under specific circumstances require this type of report.
The person or entity to which property belongs or is
Pre-escheat Owner Outreach
Also called "procedural due diligence”. The actions
taken by a holder beyond and prior to any state mandated due diligence, in an
effort to locate property owners prior to escheatment to the state. These
efforts can include reaching out to property owners via telephone, mail, e-mail
or other means and they can also include searching for better addresses, in the
event of the holder having received returned mail. It is advisable to clearly
document all contact. Further, as a part of the "procedural due diligence
process” some holders also perform accounting error review and research to
resolve property items that may appear to be unclaimed property but are
actually the result of accounting error.
Also, sometimes referred to as the "jurisdictional
rules”. The priority rules have been established by a series of U.S. Supreme
Court cases that determine the order in which states/jurisdictions are entitled
to receive unclaimed property. The first priority is given to the state of the
last known address of the apparent owner, as shown on the holder's books and
records. Where there is no such address sufficient for the delivery of mail,
the second priority is given to holder's state of domicile incorporation.
A person or entity that has the legal right to property.
An arrangement between two states in which information and
unclaimed property is collected by one state and exchanged with another. These
agreements allow companies holding incidental property whose owner's last known
address is in another state, to report it to the domiciliary state. However,
note that the property being reported to the domiciliary state must be reported
according to the dormancy period and other requirements of the state to which
the property would be required to be reported under the priority rules. Further,
it is important to note, not all states have reciprocal agreements, therefore,
research is recommended before pursuing this option. In addition, when
reciprocal reporting is used, there is no indemnification granted by the states
The maintenance of records for a period of time in
accordance with state law or state administrative practices.
The operational internal review of a holder's books and
records to identify unclaimed property and/or to resolve items that may appear
to be unclaimed property but are the result of accounting errors or subject to
exemption or preemption.
Report and Remit
The simultaneous single filing of the final report
containing owner and property detail and the associated remittance. While in
the 1980s many state were "dual reporting” most states are now
"report and remit "states.
The process prescribed by state unclaimed property laws for
the reporting and remittance of unclaimed property. States require holder to
report through either via "report and remit” or "dual reporting.”
These typically refer to contact letters sent to apparent
owners prior to statutory due diligence letters. While these are not required
by law or regulation and may not replace the requirement for conducting due
statutory diligence, some consider them a best practice and a method to enhance
The Securities and Exchange Commission's rule which defines
the requirement to search for lost security holders making use of an informational
database. This rule mandates these searches for transfer agents and broker
dealers. Please refer to the rule for more specific information on the holders
covered by the rule and the rule's requirements.
This acronym stands for States National Audit Program. Audit conducted by state auditors on behalf of multiple
State of Corporate Domicile
The state of incorporation or formation of a holder.
Statues of Limitations
State statutes that establish time limits for pursuing a legal
claim. In unclaimed property law, statutes of limitations are sometimes used to
determine how far back a state may reach to claim funds held by a Holder in an
audit. However, most state unclaimed property statutes contain an
"anti-limitation” provision, which generally provide that statutes of
limitation, other than those defined within the unclaimed property laws
themselves, generally will not apply to defeat a state's right to unclaimed
property. Further, even states that have a statute of limitations in their
unclaimed property laws have restricted them so that they do not apply if a
holder has not reported unclaimed property or has done so fraudulently.
Tangible Personal Property
Property that is physical in nature, such as a watch in a
safe deposit box.
Third Party Audit
Audit performed by a state-contracted audit firm generally
for a contingent fee and sometimes for hourly fees.
The shares of stock associated with a string of un-cashed
Unclaimed Property Laws
Laws that govern the handling and processing of unclaimed or
abandoned property. These laws typically include criteria for identifying,
reporting and remitting unclaimed property. Commonly, these laws are custodial
in nature and jurisdictions act as custodians of escheated property until the
rightful owner comes forward to claim the property.
Uniform Unclaimed Property Acts
Uniform codes developed by the Uniform Law Commission
intended to promote uniformity in state unclaimed property laws. The Uniform
Disposition of Unclaimed Property was promulgated in 1954 and revised in 1966. Subsequently
the Uniform Act of 1981 and the Uniform Act of 1995 were issued. All 50 states,
Washington D.C., Puerto Rico, Guam and the Virgin Islands have adopted
unclaimed property statutes; most jurisdictions have enacted unclaimed property
laws based on one of the versions of the Uniform Acts.
The Unclaimed Property Professionals Organization (UPPO) is the trade association for holders
and other private sector unclaimed property professionals that is the premier
resource for professional unclaimed property education, information, networking
Voluntary Disclosure Agreements
are offered by states to encourage holders to come into compliance prior to
receiving an audit notice. Typically, a VDA would involve conducting a
self-audit and sending the results to the state as part of the VDA. VDAs can be
useful in limiting liability for holders starting unclaimed property programs
for the first time or expanding existing programs to include previously
unreported property types. Some states have very formal VDA processes, while
others are more informal.