Here you will find valuable knowledge pertaining to Arizona State escheat and unclaimed property laws.

Should there be a specific question that we fail to answer here, we’re ready and willing to provide our insight.  To submit your inquiry and get more information, fill out this brief form below or get in touch directly with the Arizona Unclaimed Property Unit.

Aspects of Arizona Unclaimed Property and Escheatment Law

Listed here are several aspects of Arizona unclaimed property and escheatment law to keep in mind in order to avoid interest and penalties:

• Failure to pay or deliver property in the proper time period (scroll down) results in interest at 1.5% per month or fraction of a month from the date which the property should have been paid or delivered.
• The end result of failure to pay or deliver property altogether is a civil penalty of 25% of the value of abandoned property.
• If no report is submitted, there will be a $100 fee each day late up to $5,000.

Recent Adjustments to Arizona Escheatment Law

Unclaimed property laws in Arizona have been subject to some changes recently:

• On December 23, 2009, SB 1003 went into effect and shortened many of the dormancy periods enumerated in the Arizona Unclaimed Property Act.
• On April 23, 2010, HB 2111 was signed to revert the dormancy period for traveler’s checks back to 15 years.
• Effective July 20, 2010, the HB 2453 will return the dormancy period for securities property from the recently passed 2 year dormancy period to 3 years.  Bond property dormancy period will remain at 2 years, but the interest on that debt changes to 3 years.

Other Links & Resources

Arizona Department of Revenue: About Unclaimed Property

Arizona Revised Statutes on Unclaimed Property

Contact Information for Delaware State Bureau of Unclaimed Property

ARIZONA
Department of Revenue
Unclaimed Property Unit
PO Box 29026
Phoenix, AZ 85038-9026
1-602-364-0380
1-877-492-9957

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This page provides key information regarding to Delaware State escheat laws concerning reporting & compliance.

If there is a specific question that is not addressed here, we are happy to assist you with that as well. For immediate assistance, contact us directly at (800) 848-8896 or complete our contact form.

Core Concepts of Delaware Unclaimed Property and Escheat Law

The following are a few aspects of Delaware escheatment law to be considered when minimizing costs for your organization:

• If you fail to submit a report or the proper forms to the Delaware Bureau of Unclaimed Property before or on the due date it could cost you 5% of the unclaimed property value if the failure is for less than one month. An additional 5% is applied per month up to 50%,
• If you fail to pay the amount of unclaimed property shown on any report required by the chapter on or before the due date, 0.5% of the unclaimed property value will be added to the amount due if the failure is for less than one month.  An additional 0.5% will be applied monthly up to 25%.
• Any deficiency of payment due to fraud will cost 75% of the portion of the deficiency in payment.

Recent Changes to Delaware Escheatment Law

Escheatment laws in Delaware have undergone several changes in recent years:

• On April 22, 2005, Senate Bill Number 25 moved the payment and delivery date of all types of unclaimed property from May 31 to March 1 so that payments must be made at the same time abandoned property reports are filed
• On June 30, 2008, Senate Bill Number 334 lowered the period of dormancy from five years to three years for investment-type properties.

Other Links & Resources

Delaware State Escheat – Unclaimed Property Page

Delaware Unclaimed Property Law

Delaware Abandoned Property Law: What Every Company Should Know About an Emerging Area of State Law

2005 Delaware Unclaimed Property Law Changes

2008 Delaware Unclaimed Property Law Changes

Contact Info for Delaware State Bureau of Unclaimed Property

Delaware Division of Revenue
Bureau of Unclaimed Property
PO Box 8931
Wilmington, DE 19899
1-302-577-8782
1-800-292-7826

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Maybe they’ve moved to a new address without notifying their investment firm, perhaps they’ve removed the IRA from their brokerage account or even passed on. Nonetheless, no matter what the situation, firms are constantly trying to track down clients whose accounts are inactive or even dormant.

Recently, Dave McCrystal, Executive VP of Corporate Development at Keane, spoke to IA Watch about the best practices for firms when locating a missing client and the rules for preventing account escheatment.

As we’ve mentioned before, states are becoming hungrier for cash due to economic concerns and as a result are expanding their investigations into unclaimed property by looking at dormant accounts – like bank accounts, savings accounts, etc. For most states, the dormancy period is typically between three to five years of inactivity. Once the states have the money in their possession, however, it is usually allocated for various statewide projects under the assumption the person will never show up to claim the property.

For investment firms themselves, one of the major red flags that a client or customer has an inactive account is returned mail. In order to reduce the risk of account dormancy, firms should correct outdated addresses, check once a year for client activity, comb through client lists and label those who are elderly and at risk of passing on, and make sure they have the contact information for the next of kin for aged clients.

By keeping a close eye on client accounts, businesses should be able to minimize the risk of missing account holders and be more prepared when it comes time to file abandoned property each year.

Contact us to learn more about dormant account escheat rules

View the entire article by Dave McCrystal

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Recently, Debbie Zumoff, Executive Vice President and Chief Compliance Officer at Keane, appeared live via satellite on Good Day Orlando to educate Florida consumers about how to keep tabs on all of their investment accounts. Click ‘Read More’ to view the segment.

• Know Your State’s Unclaimed Property Laws – Unclaimed property laws vary by state – and even by the type of account you own. It’s important to know what your state’s dormancy periods are by account and how they define account “activity.”
• Make a List of All Your Accounts and Where They Are Held – List all bank accounts, retirement accounts, brokerage and investment accounts, etc. and keep it in a safe place. It’s also important to let your heirs know where this list is being kept should something happen to you.
• Keep Active on All Accounts – For example, log-in to each one of your online accounts at least once per year. For each bank or brokerage account you have, make at least one balance inquiry, deposit or withdrawal each year.
• Don’t Hold Onto Checks – Always cash or deposit checks when you receive them.
• Keep Holders Updated – Always notify the holder of your funds in the event of an address or name change.

If consumers stay on top of their accounts and make sure they keep active, they should successfully be able to prevent unclaimed property escheatment and maintain personal control over their money.

Contact a Keane unclaimed property consultant for more information

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Setting the stage was a session entitled Legislative and Legal Overview of the Unclaimed Property Year.   Although this was not a year for urgent or key legislation since really interesting or controversial bills rarely make it out of committee; there were a few trends worth noting.

Gift Card Expiration Law

Gift card laws are still muddled and conflicting. Issues of exemption, expiration, fees, open loop, awards, loyalty cards and points vary state by state.  With $80 to $100 billion dollars or 10% of gift card value typically never used, these provisions will remain in flux for years to come.

Electronic Unclaimed Property Reporting

The states recognize that electronic contact is a huge issue for the holder community at large, so one issue raised was whether or not due diligence can be performed via email if that modality is available to a holder.  This would depend in part on interpretations of the UETA (Uniform Electronic Transaction Act) and whether a “writing” as required by many unclaimed property laws can be provided electronically.  One observation was that the states are permitted to meet their publication requirements via the internet so why shouldn’t holders be able to take advantage of the same technological advances for due diligence compliance?

Electronic unclaimed property reporting is a definite trend.  In fact, some states are now returning reports and imposing penalties for non-compliance with their electronic reporting requirements.  One state even has a requirement for electronic reporting with no minimum records requirement.  This state is allowing holders to apply for hardship waivers of the requirement and other states may follow.

Continued Shift In Reporting Law

General reporting requirements continue to shift. From Texas’ requirement for drivers license or email address detail, where available, to Arizona’s “bouncing” dormancy periods from 3 years to 2 years and back again to 3 years, state legislatures are struggling to determine what’s reasonable for intangible property types.  Take the issue of deceased owner records for example.  The states know that lots of holders know when an owner is deceased. During the recent IRA “study”, dates of death and beneficiary information were requested by third party auditors but refused by the holders as “not required to be provided by law”.

The states take the position that the holder community has an abundance of information that the state reports don’t require per se, but if the information was provided by holders, after dealing appropriately of course with the legitimate privacy concerns, many more people would be located by the states and reunited with their unclaimed funds.  If, for example, no beneficiary detail is provided when reporting IRA property, the states can easily locate the wrong party, thus placing the indemnity of the holder at risk.  This and other similar issues require much dialogue between states and industry representatives because comprehensive reporting instructions are spotty at best and not statutorily binding.

The states still discuss their goal to erode the holders’ resistance to reporting retirement assets.  Some states set the example with their own retirement systems; Tennessee requires that its retirement system report unclaimed funds and Virginia lists names of unclaimed retirement account holders on its unclaimed property website.

A huge hole in the unclaimed property law was identified in the form of pre-paid funeral contracts. It was suggested that states examine this category of assets as there is a large repository of unclaimed funds residing with those entities.

NAUPA Conference Forum

The next session of interest to the holder community was the NAUPA business meeting during which there was discussion that NAUPA sees great benefit to meeting with the holder community in a regular conference forum.  NAUPA representatives are working with NAST to develop some concepts as to how such a conference might work.

NAUPA indicated that it owed a response to the Uniform Law Commission by June 1, 2010 in terms of a new uniform unclaimed property act draft.  NAUPA indicated in the business meeting that a majority of the states do not think a new uniform law is the way to go, rather they feel that individual state legislative or rule changes would be more appropriate.  One suggestion was that NAUPA consider engaging in its own independent uniform law drafting process over time to aid in building consensus among the various stakeholders in the unclaimed property reporting process.

NAUPA leadership then indicated that more audit training is needed.  They plan to conduct this in May of 2011.  They also plan on networking among the states’ internal audit staffs to share information across the nation!

Speaking Of Audits…

Kelmar and Delaware presented a brief panel on audits and how they can be expedited.  Most of the information presented was basic in its nature but two comments were worth repeating here.  First, that contract auditors are partnering on audits more frequently and second, that their estimates indicated that compliance with unclaimed property law is less than 5% in Delaware.

There were several other sessions touching on the following topics which were not material to holders’ interests:

• state efforts to locate owners featuring Texas’ new program
• update on missingmoney.com
• tax reporting by only 20-30% of the state unclaimed property offices – this will become an issue when IRS mandated cost basis reporting trickles down to the state level in 3-5 years.
• claims automation
• states’ increased use of prepaid debit cards to eliminate check disbursements

Debbie L. Zumoff is an expert in the field of unclaimed property law, the legislation process, and practical applications in the corporate business environment. Debbie has served as Keane’s Chief Compliance Officer for 26 years, directing the development and delivery of Keane’s unclaimed property compliance solutions.

Contact a Keane consultant for more information

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Debbie Zumoff, Chief Compliance Officer at Keane, recently spoke with John Cummings, Editor of Business Finance and Author of the BizTaxBuzz Blog, about escheat audits and why they seem to be in the future of so many companies.  Click here to read the whole post. 

Two of the downsides to not reporting unclaimed property are penalties and interest, which can quickly add up and even double the amount of underlying liability. For most companies, this can mean big losses. However, there are number of audit risk red flags that companies can look out for when it comes to unclaimed property. These include not reporting all property types, using inappropriate dormancy triggers, failing to perform state-mandated due diligence and many others. If companies are aware of these red flags upfront and keep them in mind when it’s time to file unclaimed property each year, they can better prepare for and defend against escheat audits and significantly reduce risk to their organization.

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Unclaimed Property Reporting Laws: State By State Changes

Delaware Unclaimed Property Reporting

SB 272

Introduced 5/13/10, Passed Senate 6/22/2010, Passed House 6/29/2010.

Section 1 of the Act provides for an administrative review process at the conclusion of an unclaimed property examination. This review process may be invoked at the option of the unclaimed property holder. It will allow the holder to file a written protest, submit additional information in support of the protest and request that the Audit Manager reconsider the Department’s findings following an examination.

Section 2 of the Act creates a limited exemption from the definition of property for abandoned property purposes that arises from transactions between merchants covered by the Uniform Commercial Code where, for whatever reason, a merchant holder receives goods for which the holder was never invoiced by the seller.

Sections 3 and 4 of the Act clarify that, in accordance with established accounting and industry practice, the State may employ estimation techniques in certain circumstances in order to determine a holder’s liability for abandoned or unclaimed property.

Sections 5 through 10 reduce the administrative burden of compliance by holders by reducing the number of reports to be made and eliminating the duty to hold such reports for public inspection in their headquarters.

Section 11 of the Act corrects the unintended omission to include all enumerated items of property in the exception to the definition of property for purposes of the Abandoned Property Law in subdivision 1198(11) when that definition was amended in 76 Del. Laws, c. 277, §2 (June 30, 2008). Prior to its amendment, the exception had included all enumerated items in subdivision 1198(11), and the General Assembly did not intend to change that result when it amended the subdivision in 2008.

HB 471

Introduced 6/15/2010, Passed House 6/24/2010

This Act remedies confusion that exists as a result of the current statutory construction of Delaware Code Title 12, §1203(a) and (b).  §1203 concerns the discharge of liability once a holder has turned over property in escheat.  In certain cases, a legal argument can be made that §1203(a) and (b) apply contemporaneously to a similar set of facts.  This amendment eliminates that illogical result by making clear that subsections (a) and (b) are mutually-exclusive.

State Dormancy Periods For Escheatment

New Jersey Dormancy Periods

SB 2112, A3002

Introduced 6/21/10, Passed 6/30/2010, Effective 7/1/2010

This Act reduces the dormancy period for traveler’s checks from 15 years to 3 years and the dormancy period for money orders from 7 years to 3 years.  The bill also includes several provisions relating to stored value.  The bill also includes several provisions relating to stored value.  The bill also limits the imposition of dormancy fees as follows:  1)Precludes the imposition of dormancy fees on travelers checks or money orders in the first 12 months after issuance and limits permissible dormancy fees to $2 per month; and 2) Precludes the imposition of dormancy fees on stored value cards, credit balances, overpayments, security deposits, unused tickets, refunds, credit memoranda and similar instruments.

New York Dormancy Periods

HB 11586

Introduced 6/28/2010, Referred to committee 6/30/2010

These bills propose to reduce dormancy periods from five to three years for all banking property including unclaimed deposits, as well as bank-held bond and mortgage property.  The legislation also proposes a dormancy reduction from five to three years for escrow property.

Committee Research

North Carolina Committee Research

SB 900

Introduced 3/25/09, Passed 7/22/2010

This Act provides for studies by the Legislative Research Committee. The relevant topic proposed is for the Legislative Research Committee to study the need for statutory changes to the law governing location of the legitimate owner of unclaimed property prior to the assumption of the abandonment of the property by the State Treasurer. The Committee is also to investigate permitting holders to charge fees for due diligence compliance.

Gift Card Escheatment Legislation

New Jersey Gift Cards

A3091

Introduced 6/28/2010, Referred to committee 7/1/2010

Adjusts period triggering abandonment for stored value cards from 2 to 5 years and exempts stored value cards useable solely for telephone services from State’s escheatment processes

New York Gift Cards

AB 11007

Proposed 5/5/10, Filed 7/20/10, Adopted 8/4/10, Effective 8/4/10

Requires disclosure to consumers of the type of rebate being offered, whether additional fees may apply, and remittance of the rebate to the consumer.

Hawaii Gift Cards

HB 2289

Introduced 1/22/10, Passed 7/7/10, Effective 7/7/10

In order to comply with the Federal Credit Card Accountability Act of 2009, Hawaii amended its existing statute concerning gift certificates by extending the minimum expiration period for gift certificates from two to five years; limiting the imposition of issuance or activation fees; amending the definition of “gift certificate;” defining “service fee” to exclude activation or issuance fees.

Court Registry Funds

Rhode Island

SB 2560, HB 7898

Introduced 2/11/2010, Enacted 6/25/2010, Effective 6/25/10

This act would bring uniformity to the state courts’ treatment of unclaimed funds by extending the application of the escheatment statutes to all of the courts within the state court system and would provide for the uniform treatment of all unclaimed funds held in the court registries. The act would allow for yearly escheatment of funds unclaimed for five (5) years or more and would impose a five (5) year limitation period on the ability of individuals to file a claim for funds held in the court registries.

This list is not exhaustive, but it does contain some important developments. To receive unclaimed property legislative updates and alerts in real-time, subscribe to Keanotes, our premium quarterly newsletter.

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On March 17th the Governor of Indiana signed HB 1083 into law, with an effective date of July 1, 2010. The following dormancy periods were reduced from five years to three years: (1) A demand, savings, or matured time deposit. (2) Property payable as a result of a demutualization, rehabilitation, or related reorganization of a mutual insurance company. (3) All other property not otherwise specified under the act (catch-all provision).

Indiana’s new law reducing dormancy periods takes effect the day after the cutoff date for November 2010 reporting and can therefore be confusing as to whether it applies to the November 2010 reporting period, which is does not. To clarify any confusion, Indiana issued an update on their website. Initially, the Indiana website wrongly indicated that the new law affected the November 2010 reporting. The website has been corrected and now reads:

Effective July 1, 2010 the statutory holding period for certain properties has changed from five (5) years to three (3) years. For the property types affected, see I.C. 32-34-1-20 as amended, by clicking amended holding periods. The amended holding periods must be reflected in the report of holders due NLT November 1, 2011.

We will continue to track any changes regarding Indiana unclaimed property law & legislation in our unclaimed property blog and our quarterly unclaimed property newsletter, Keanotes.

Should you have any questions or require additional information, you may also contact me directly via email at sregan@keaneco.com.

Sincerely,
Scott Regan
Vice President
The Keane Organization

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Specifically, this Act improves the administration of the Delaware Abandoned and Unclaimed Property Statute by providing holders with additional clarity and certainty regarding the enforcement of the Delaware abandoned property statute.

Section 1 of the Act provides for an administrative review process at the conclusion of an unclaimed property examination.

This review process may be invoked at the option of the holder. It will allow the holder to file a written protest, submit additional information in support of the protest and request that the Audit Manager reconsider the Department’s findings following an examination.

The Audit Manager must make a written determination based on the protest and on the entire record of the examination and the materials submitted with the protest by the holder.

After the Audit Manager makes a determination on a protest, the holder may request further review by the Secretary of Finance, who will appoint an Independent Reviewer to make a determination on the holder’s appeal.

The Secretary of Finance may adopt or reject the Independent Reviewer’s report in whole or in part.

Section 2 of the Act creates a limited exemption from the definition of property for abandoned property purposes that arises from transactions between merchants covered by the Uniform Commercial Code where, for whatever reason, a merchant holder receives goods for which the holder was never invoiced by the seller.

The Act is not intended to change the reach of the definition of “property” in Delaware’s unclaimed property statute – § 1198 – to the extent that it applies to a merchant holder’s accounts payable, accounts receivable or any other type of credit due from a holder to a creditor.

No generally applicable business-to-business exemption is intended to be created by this section.

Sections 3 and 4 of the Act clarify that, in accordance with established accounting and industry practice, the State may employ estimation techniques in certain circumstances in order to determine a holder’s liability for abandoned or unclaimed property.

Sections 5 through 10 reduce the administrative burden of compliance by holders by reducing the number of reports to be made and eliminating the duty to hold such reports for public inspection in their headquarters.

Section 11 of the Act corrects the unintended omission to include all enumerated items of property in the exception to the definition of property for purposes of the Abandoned Property Law in subdivision 1198(11) when that definition was amended in 76 Del. Laws, c. 277, §2 (June 30, 2008). Prior to its amendment, the exception had included all enumerated items in subdivision 1198(11), and the General Assembly did not intend to change that result when it amended the subdivision in 2008.

Section 12 of the Act is a severance provision.

Section 13 of the Act provides for effective dates for the various sections of the Act.

Please see the following Department of Finance page for more information on Delaware’s unclaimed property statute.

We will continue to track any changes regarding Delaware legislation in our unclaimed property blog and our quarterly unclaimed property newsletter, Keanotes.

This post aims to answer that question.

The Basics Of Unclaimed Property Recovery & Reporting

Virtually every company has abandoned property of some form or another.

According to abandoned property law in every state, all companies are required to file reports annually with the states.

The process of unclaimed property reporting involves two phases: initial reporting (to come into compliance for the very first time) and annual reporting.

By law, unclaimed property should be reported to the state of the property owner’s last known address.

If there is no known address, the property is reported to the state in which the business is incorporated.

State unclaimed property offices hold billions of dollars of “lost” or “abandoned” property belonging to individuals as well as to businesses that have, for example, changed addresses, had a name change, or gone out of business.

Some common examples of what is reportable include:

• Customer deposits and refunds, credit balances and over payments
• Unclaimed security deposits, refund and dividend checks
• Small sums left in checking accounts
• Certificates of deposit (CDs) that have remained inactive
• Proceeds from the insurance company that were never deposited

Do the following to keep your unclaimed property recovery & reporting current:

• Keep all account information up to date
• In case of a change in your business name or address, send out notifications of the change
• If you regularly receive dividends or benefits, and the checks stop coming, notify the company of the problem immediately

Abandoned property can be reunited with the rightful owner even 30 years or more after it was turned over to the state. In fact, in most states there is no time limit on when you can conduct an unclaimed property recovery. Most states hold the money in perpetuity, waiting for the rightful owner to come forward and make a claim.

It is a good idea to check with state unclaimed property offices every five years or so even if you think your business hasn’t lost any property.

Keeping Track of Your Unclaimed Property Recovery & Reporting Options

Keane is a “holder advocate” or abandoned property specialist whose goal is simply to provide businesses with a range of escheat services, from obligation analysis and mitigation to

annual reporting, audit defense, and asset recovery.

If you wish to be compliant with the law and improve your business’s cash flow at the same time, pay attention to unclaimed property reporting laws (and the frequent changes in the laws) on an ongoing basis.

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