What Is Unclaimed Property?
Generally,unclaimed property
(also called
“abandoned property” or “escheatable property”) is intangible property that has not been claimed by its rightful and/or apparent owner for a specific period of time (“dormancy period”). An “owner” is the person entitled to receive the property such as a payee on a check or a shareholder. A “holder” is the party (such as a corporation) that has the obligation or owes the debt to the owner.
Each state plus some U.S. jurisdictions (i.e. Guam, Puerto Rico, Virgin Islands, etc.) and some Canadian provinces (i.e., British Columbia, Alberta, Quebec, etc.) have statutes that specify which types of property are reportable and how long property may be retained by a holder before it is reportable (the dormancy period). The most typical dormancy periods are 1 year (for payroll) and 3 or 5 years for most other property types.
Property falls into two broad categories:
General Ledger Property and Securities Property. General Ledger property typically includes uncashed payroll, vendor, and rebate checks, aged accounts receivable credit balances, unredeemed gift cards or certificates, and distributions resulting from insurance policies and financial accounts. Securities-related property includes equity securities and related dividends, debt obligations and related interest, and dividend reinvestment accounts. Many times a company that has been compliant with state unclaimed property laws finds that it indeed has past due unclaimed property due to an acquisition or due to divested companies that are included in the scope of an audit reach back period.
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