|Unclaimed Property FAQ|
What is unclaimed property?
Unclaimed property is a broad term that defines intangible (e.g., insurance policies) or tangible (e.g., gold coins) property that has been abandoned or lost by its rightful owners for an extended amount of time. For instance, assets left by a deceased individual and not identified in a will often end up as unclaimed property. States have different laws that stipulate how long individuals have to claim their property before it is escheated (transferred) to the state.
What is an unclaimed property holder?
Holder is used to describe any commercial entity that has unclaimed property on its balance sheet. Examples might include a bank with abandoned safe deposit boxes, a restaurant with unused gift card balances or an insurance company with unclaimed policy accounts or benefits.
How much unclaimed property is accounted for in the U.S. each year?
residents abandon more than a billion dollars of tangible and intangible
property annually, making it a sizable source of revenue for state governments.
The purpose of unclaimed property laws is to reunite lost owners with property
that is rightfully theirs and protect holders from subsequent claims by the
owner after the property is transferred to the state.
Isn’t there a unified standard or set of legal requirements for handling unclaimed property?
There are over-arching
ethical and business principles that apply, but each state has different laws
regarding unclaimed property and navigating them can be a challenge, even for
experienced professionals. get the latest news and inside information
about reporting/compliance procedures for each state, with action alerts on
breaking regulatory issues and member forums for discussing best practices.
Why is it important to keep track of unclaimed property?
require holders to review their business records and make an annual report of
unclaimed property holdings, including evidence that they have taken
appropriate steps to return the property to its rightful owners. There can be
harsh penalties for holders that do not comply with state reporting guidelines.
What happens if holders fail to comply with a state’s unclaimed property rules and laws?
If a company is audited and
found to be in violation of unclaimed property compliance standards, the
punishment could include interest,
fines, penalties and other monetary damages.
See our glossary of terms for more unclaimed property facts and definitions.