What to do if you have unclaimed property? 2025

Unclaimed property can be a significant issue for both individuals and businesses.

Understanding what unclaimed property is, how it becomes unclaimed, and the steps you need to take to handle it properly can help you avoid potential legal and financial consequences. This article will guide you through the process of dealing with unclaimed property.

What Does Unclaimed Property Mean?

Unclaimed property refers to any financial asset that has been abandoned or unclaimed by its rightful owner for a specific period of time. Examples include:

Bank accounts and contents of safe deposit boxes
Dividends, payroll, or cashier’s checks
Stocks, bonds, mutual fund accounts
Mineral interest or royalty payments
Court deposits, trust funds, escrow accounts
Inactive savings accounts
Life insurance proceeds
Customer overpayments
Unused gift certificates

These items must be returned to the owner or turned over to the state if the owner cannot be located. The Secretary of State lists these items on the official state website, accessible to the public for searching unclaimed property.

How Does Property Become ‘Unclaimed’?

Property becomes unclaimed after a period of inactivity, known as the dormancy period. The dormancy period varies by the type of property and state regulations but typically ranges from one to five years. Common reasons for property becoming unclaimed include the owner forgetting about it, passing away, or moving without updating their address.

Steps to Take if You Have Unclaimed Property

If you have identified unclaimed property, follow these steps to handle it correctly:

Identify Unclaimed Property

The first step is to identify any unclaimed property items. This involves researching and documenting all potential unclaimed assets. Businesses should regularly review their records to ensure compliance with unclaimed property laws.

Notify the Owner

The next step is to notify the owner or return the unclaimed property to them. This is known as due diligence. Businesses must make a final attempt to locate the owner before turning the property over to the state.

Remit Unclaimed Property to the State

If the owner cannot be found, the unclaimed property must be remitted to the state. This process is called escheatment. Once the property is turned over to the state, the state assumes responsibility for it and the owner can claim it through the state’s unclaimed property office.

Common Questions About Unclaimed Property

Businesses often have questions about unclaimed property, such as:

What types of property are subject to unclaimed property rules?
What value should be reported?
To which state should the property be reported?
How do you track down the property owner?
How do you know if an account is dormant?
How long after the account is dormant do you have to report it?

The answers to these questions vary depending on state policies. It is essential to be familiar with the specific rules and timelines for reporting unclaimed property in the states where you do business.

Rules Surrounding Unclaimed Property

Understanding the rules and regulations surrounding unclaimed property is crucial for compliance. Key points include:

Unclaimed property rules apply even without a business presence (nexus) in the state.
The statute of limitations for unclaimed property audits can be extensive, often ranging from 10 to 30 years.
Auditors may use statistical extrapolation for older years if records are not available.
There are usually no administrative appeal procedures for unclaimed property audits; businesses must either pay or litigate.
Penalties and interest for non-compliance can be substantial, sometimes equaling the value of the unclaimed property.

Unclaimed Property in Financial Institutions

Financial institutions like banks and credit unions are prone to unclaimed property issues due to their diverse range of products and services. Common types of unclaimed property in financial institutions include:

Security deposits
Club accounts
Certificates of deposit
Unidentified deposits and suspense accounts
Credit balances from loans
Stock and liquidating dividends
Bond interest and principal
Fiduciary checks
Cash dividends
Warrants

Financial institutions must implement plans to track and remit unclaimed property, including monitoring inactivity fees and ensuring compliance with state regulations.

Importance of Compliance in Unclaimed Property

Compliance with unclaimed property laws is essential to avoid costly penalties and legal issues. States are increasing enforcement efforts, and there is no statute of limitations for unclaimed property audits if all unclaimed property has not been turned over. Businesses must be diligent in identifying, notifying, and remitting unclaimed property to the appropriate state authorities.

For more detailed information on unclaimed property and how to handle it, check out these helpful articles:

Dealing with unclaimed property requires understanding its definition, identifying potential unclaimed assets, and following the correct steps to comply with state regulations. By being proactive and diligent, businesses can avoid costly penalties and ensure compliance with unclaimed property laws. Regularly checking state databases and staying informed about changing regulations can help manage unclaimed property effectively.