TRMG OCTOBER 10, 2011 WANDA BORGES, ESQ. BORGES & ASSOCIATES, LLC 575 UNDERHILL BLVD. SYOSSET, NY x 225 0TRMG_ 2011

1 ESCHEATMENT  Origination stems from feudal England  Escheat was a privilege granted exclusively to the King to take the property of a person who died intestate (without a will)  Modern Day: ◦ Escheat is a power which each state has to acquire title to property for which there is no owner

TRMG_ UNIFORM UNCLAIMED PROPERTY ACT  Completed by the Uniform Laws Commissioners in 1995 ◦ Superseded  Uniform Disposition of Unclaimed Property Act of 1954  Uniform Unclaimed Property Act of  Adopted by: ◦ Alabama, Arizona, Arkansas, Hawaii, Indiana, Kansas, Louisiana, Maine, Michigan, Montana, Nevada, New Mexico, North Carolina, U.S. Virgin Islands, Vermont, West Virginia ◦ Introduced in 2011 to Mississippi

TRMG_ UNIFORM UNCLAIMED PROPERTY ACT  Even those states who have not adopted the UUPA have some version of an Abandoned/Unclaimed Property Statute ◦ Each state which has adopted the UUPA  Has or will modify it to its own requirements  Statute may contain the words  Abandoned Property  Unclaimed Property  The word “escheat” is rarely used in the statutes

TRMG_ UNIFORM UNCLAIMED PROPERTY ACT  U.S. Supreme Court cases which lead to the creation of the Uniform Unclaimed Property Act ◦ Texas v. New Jersey (1965) ◦ Pennsylvania v. New York (1972) ◦ Delaware v. New York (1993)

TRMG_ UNIFORM UNCLAIMED PROPERTY ACT  U.S. Supreme Court cases clarified: ◦ Unclaimed intangible property is payable to the state of the owner’s last known address ◦ The state of the last known address can claim the abandoned property ◦ If no claim is asserted by that state, then it is payable to the state of the holder of the property

TRMG_ PROPERTY DEFINED BY THE UUPA  Tangible property (that held in a safe deposit box or other safekeeping depository  Intangible property held, issued, or owed ◦ in the course of the holder’s business – OR – ◦ By a government, governmental subdivision, agency, or instrumentality – AND ◦ All income or increments therefrom

TRMG_ EXAMPLES OF UNCLAIMED PROPERTY  Money (checks, drafts, dividends)  Credit Balances  Deposits  Uncashed money orders  Traveler’s checks  Expense Reimbursement checks  Payroll checks  Commission checks  Rebates

TRMG_ PRESUMPTION OF ABANDONMENT UNDER THE UUPA  Property is presumed abandoned if it is unclaimed by the apparent owner during the times set in the UUPA  Pertinent times: ◦ Money or credits owed to a customer as a result of a retail business transaction – 3 yrs ◦ Wages or other compensation for personal services – 1 yr ◦ All other property – 5 yrs

TRMG_ UNCLAIMED PROPERTY UNDER THE UUPA  Property is unclaimed if, for the applicable period set forth, the apparent owner has not communicated in writing or by other means reflected in a contemporaneous record prepared by or on behalf of the holder, and has not otherwise indicated an interest in the property

TRMG_ REPORTING REQUIREMENTS UNDER THE UUPA  Description of the property  Name, last known address  SS number or taxpayer id number  The date, if any, on which the property became payable, demandable, or returnable, and the date of the last transaction with the apparent owner of the property  Other information required by Rule

TRMG_ FILING REQUIREMENTS UNDER THE UUPA  Report must be filed before November 1 of each year  Report must cover 12 months next preceding July 1 of that year  CAVEAT – remember this is the rule under the UUPA – each state WILL DIFFER

TRMG_ NOTIFICATION REQUIREMENTS UNDER THE UUPA  Written Notice must be sent to the apparent owner ◦ Not more than 120 days ◦ Not less than 60 days ◦ Before filing report

TRMG_ NOTIFICATION REQUIREMENTS UNDER THE UUPA  Notice must advise ◦ that the holder is in possession of abandoned property ◦ that address for apparent owner is holder believes to be accurate ◦ The claim of apparent owner is not barred by a statute of limitations ◦ The value of the property is $50 or more [Most state statutes use a $25 minimum]

TRMG_ PENALTIES AND INTEREST UPON FAILURE TO FILE REPORT  Interest accrues at rate of EITHER ◦ 12% per annum ◦ 2 percentage points above the annual rate of discount in effect on the date the property should have been paid or delivered  Interest accrues on value of property from the date the property should have been reported, paid or delivered.

TRMG_ PENALTIES AND INTEREST UPON FAILURE TO FILE REPORT  Civil Penalty of $200 for ◦ each day the report, payment, or delivery is withheld – OR ◦ The duty is not performed ◦ Up to a maximum of [$5,000] [subject to periodic adjustment or state’s discretion]

TRMG_ PENALTY UPON WILLFUL FAILURE TO FILE REPORT  WILLFUL failure to report, pay or deliver shall result in ◦ Civil Penalty of [$1000] for each day the report, payment or delivery is withheld – OR the duty is not performed ◦ Up to a maximum of [$25,000]

TRMG_ PENALTY UPON FILING A FRAUDULENT REPORT  A holder who makes a fraudulent report shall pay, in addition to interest, ◦ Civil Penalty of [$1000] for each day from the date a report was due, ◦ Up to a maximum of [$25,000] ◦ PLUS 25% of the value of any property that should have been but was not reported

TRMG_ GENERALLY  The Definition of Property does not change substantially when comparing the UUPA with various state statutes and therefore will not be outlined below.  Unclaimed Property must be delivered to the state which is the last known residence of the owner of the unclaimed or abandoned property

TRMG_ DISCLAIMER  The information set forth below has been gathered from the various state statutes. This information is intended to present guidelines ONLY as to what each state statute provides and is presented for educational purposes. This information is NOT intended to be legal advice regarding any individual company reporting or not reporting unclaimed or abandoned property. Each company should rely on its own accountant or lawyer in determining what kind of reporting and to which state the reporting is required.

TRMG_ FLORIDA REPORTING REQUIREMENTS  Description of the Property  Name, last known address  SS number or taxpayer id number  Date of birth, if known, for individuals  Evidence of diligence performed to locate owner  Other information required by Rule  Value of unclaimed property > $50 ◦ <$50 may be reported in the aggregate ◦ < $10 credit balances shall not be presumed to be unclaimed

TRMG_ FLORIDA FILING REQUIREMENTS  Report must be filed by May 1 of each year  Applicable to the preceding calendar year

TRMG_ FLORIDA NOTIFICATION REQUIREMENTS  Written Notice must be sent to the apparent owners  Notice to be sent to last known address  Due diligence must be used to locate them ◦ Not more than 120 days ◦ Not less than 60 days ◦ Prior to filing required report

TRMG_ FLORIDA PENALTIES AND INTEREST UPON FAILURE TO FILE REPORT  $500 per day up to a maximum of $5,000 and  25 percent of the value of property not reported until a report is rendered for any person who willfully fails to render any report required under this chapter. ◦ If the holder acted in good faith and without negligence, the department shall waive the penalty provided herein.  Interest at the rate of 12 % p.a. from the date such property shall have been paid or delivered. ◦ The department may waive any penalty due under this subsection with appropriate justification.

TRMG_ FLORIDA PENALTY UPON WILLFUL FAILURE TO FILE REPORT  $500 per day up to a maximum of $5,000 and  25 percent of the value of property not paid or delivered until the property is paid or delivered for any person who willfully refuses to pay or deliver abandoned property to the department as required

TRMG_ FLORIDA PENALTY UPON FRAUD  Any person who willfully or fraudulently conceals, destroys, damages, or makes unlawful disposition of any property or of the books, records, or accounts pertaining to property which is subject to the provisions of this chapter is guilty of a misdemeanor of the second degree, punishable as provided in s or s s s

TRMG_ GEORGIA DISPOSITION OF UNCLAIMED PROPERTY ACT  All tangible and intangible property including any income or increment thereon, less any lawful charges, that is held, issued, or owing in the ordinary course of the holder's business and has remained unclaimed by the owner for more than five years after it became payable or distributable is presumed abandoned.

TRMG_ GEORGIA REPORTING REQUIREMENTS  Description of the Property  Name, last known address  SS number or federal identification number  Date of birth, if known, for individuals  Date when property became payable, demandable, or returnable and the date of the last transaction with the owner  Other information required by Rule  Value of unclaimed property > $50 ◦ <$50 may be reported in the aggregate

TRMG_ GEORGIA FILING REQUIREMENTS  Report must be filed by November 1 of each year  Applicable to the preceding year as of June 30

TRMG_ GEORGIA NOTIFICATION REQUIREMENTS  Written Notice must be sent to the apparent owners  Communicate with the owner to prevent abandonment  Notice to be sent to last known address  Due diligence must be used to locate them ◦ Not more than 120 days ◦ Not less than 60 days ◦ Prior to filing required report

TRMG_ GEORGIA PENALTIES AND INTEREST UPON FAILURE TO FILE REPORT  $100 per day up to a maximum of $5,000 and  25 percent of the value of property not reported until a report is rendered for any person who willfully fails to render any report required under this chapter.

TRMG_ GEORGIA PENALTY UPON WILLFUL FAILURE TO PAY OR DELIVER PROPERTY  A person who refuses after written demand by the Commissioner to pay or deliver ◦ Guilty of a misdemeanor ◦ Subject to fine not more than $1000 ◦ Subject to a prison term of not more than six months ◦ OR Both

TRMG_ GEORGIA  RECIPROCITY WITH OTHER STATES ◦ Exchange information ◦ Enable Georgia or Other State to:  Audit  Otherwise determine Unclaimed/Abandoned Property  $100 per day up to a maximum of $5,000 and

TRMG_ MINNESOTA REPORTING REQUIREMENTS  Description of the Property  Name, last known address  Nature & Identifying Number  Evidence of diligence performed to locate owner  Other information required by Rule  Value of unclaimed property > $100

TRMG_ MINNESOTA FILING REQUIREMENTS  Report must be filed by November 1 of each year  Applicable to the preceding year as of June 30 of that year

TRMG_ MINNESOTA NOTIFICATION REQUIREMENTS  Written Notice must be sent to the apparent owners  Notice to be sent to last known address  Due diligence must be used to locate them ◦ Not more than 120 days ◦ Prior to filing required report

TRMG_ MINNESOTA INTEREST UPON FAILURE TO PAY OR DELIVER UNCLAIMED PROPERTY  Upon failure to pay or deliver unclaimed property by the date set  Interest at the rate of 12 % p.a. on the value of the unclaimed property  From the date of written demand by the Commissioner

TRMG_ MINNESOTA PENALTY UPON WILLFUL FAILURE TO FILE REPORT or PAY OR DELIVER UNCLAIMED PROPERTY  Any person who willfully refuses to file a report shall be guilty of a Misdemeanor ◦ Fine of not more than $1000 ◦ Imprisonment of not more than 90 days ◦ OR Both  Any person who willfully refuses to pay or deliver abandoned property to the department as required shall be guilty of a Gross Misdemeanor ◦ Fine of not more than $3000 ◦ Imprisonment of not more than 1 year ◦ OR Both

TRMG_ OHIO STATUTE  Unlike most other states the Statute governing Unclaimed Funds in Ohio is simply called  UNCLAIMED FUNDS  It is found in Ohio Revised Code §169  GENERALLY Period of time for property to be unclaimed and deemed abandoned is 5 years

TRMG_ OHIO REPORTING REQUIREMENTS  Description of the Property  Name, last known address  Nature of property & identifying number  Social Security number, if an individual

TRMG_ OHIO REPORTING REQUIREMENTS  If value of unclaimed property >$1000 ◦ Statement of Efforts to locate owner ◦ Documentation will be maintained by holder for 5 years  Other information required by Rule  Value of unclaimed property< $50 ◦ <Each category of items of unclaimed funds ◦ The number of items in each category ◦ The aggregate value of unclaimed funds  Report must contain information as to due diligence to locate owner

TRMG_ OHIO FILING REQUIREMENTS  Report must be filed by November 1 of each year  Applicable to the preceding calendar year as of June 30th

TRMG_ OHIO NOTIFICATION REQUIREMENTS  Written Notice must be sent to the apparent owners of property having a value of $50 or more  Due Diligence includes: Internet Search manual search of public records Notification to last known address of owner  Notice to be sent to last known address ◦ 30 days prior to filing required report ◦ By U.S. mail if value is = to or >$50 but <$1000 ◦ By certified mail, RRR, if value is $1000 or more

TRMG_ OHIO PENALTIES AND INTEREST VIOLATION OF OF STATUTE  Knowingly Fails to File Report  Knowingly Fails or Refuses to Pay or Deliver Unclaimed Funds  Not more than $500 per day ◦ For each day of continued violation ◦ Each day of non-compliance is a separate violation

TRMG_ PENNSYLVANIA REPORTING REQUIREMENTS  Description of the Property  Name, last known address  Nature and identifying number  Date when property became payable, demandable or returnable  Date of last transaction with owner  Other information required by Rule  Value of unclaimed property > $50 ◦ <$50 may be reported in the aggregate

TRMG_ PENNSYLVANIA FILING REQUIREMENTS  Report must be filed by April 15 of each year  Applicable to the preceding calendar year

TRMG_ PENNSYLVANIA PENALTIES AND INTEREST UPON FAILURE TO FILE REPORT  $1000 per day up to a maximum of $10,000 and ◦ If the holder acted in good faith and without negligence, the department shall waive the penalty provided herein.

TRMG_ PENNSYLVANIA PENALTY UPON REFUSAL TO FILE REPORT OR DELIVER ABANDONED PROPERTY  Misdemeanor  Fine or not less than $1000 and not more than $10,000 – OR  Imprisonment for not more than 24 months  OR BOTH 

TRMG_ TEXAS  Texas  Personal property is presumed abandoned if, for longer than three years: ◦ the existence and location of the owner of the property is unknown to the holder of the property; and ◦ according to the knowledge and records of the holder of the property, a claim to the property has not been asserted or an act of ownership of the property has not been exercised.

TRMG_ TEXAS REPORTING REQUIREMENTS  Description of the Property  Name, last known address  SS number or taxpayer id number  Date property became payable, demandable, or returnable  Date of last transaction with property owner  Other information required by Rule  Value of unclaimed property > $50 ◦ <$50 may be reported in the aggregate  Without furnishing any of the above required information

TRMG_ TEXAS FILING REQUIREMENTS  Report must be filed by November 1 of each year  Property held as of June 30

TRMG_ TEXAS RECORD RETENTION REQUIREMENTS  Any person required to file a Report must maintain ◦ For 10 years ◦ Information contained on the reports ◦ Regardless of whether amounts are reported in the aggregate

TRMG_ TEXAS PRIVATE ESCHEAT AGREEMENTS PROHIBITED  Texas Statute prohibits  Any person…business…corporation…from entering into any private agreement relating to escheatment of unclaimed/abandoned property

TRMG_ TEXAS PENALTIES AND INTEREST UPON FAILURE TO PAY OR DELIVER UNCLAIMED PROPERTY  10 percent of the value of the unclaimed/abandoned property ◦ From Date property should have been turned over ◦ To Date on which property is actually turned over

TRMG_ VIRGINIA REPORTING REQUIREMENTS  Description of the Property  Name, last known address  SS number or taxpayer id number  Date of on which property became payable, demandable, or returnable  Other information required by Rule  Value of unclaimed property > $100 ◦ <$100 may be reported in the aggregate

TRMG_ VIRGINIA FILING REQUIREMENTS  Report must be filed by November 1 of each year  Applicable to the preceding calendar year as of June 30

TRMG_ VIRGINIA NOTIFICATION REQUIREMENTS  IF whereabouts of owner is known  BEFORE filing report  Communicate with owner and attempt to prevent abandonment  Due diligence must be used to locate owner if value of property is >$100 ◦ Not more than 60 days prior to report

TRMG_ VIRGINIA PENALTIES AND INTEREST UPON FAILURE TO PAY OR DELIVER UNCLAIMED PROPERTY  Interest at same rate as charged to delinquent taxes ◦ From date property should have been delivered ◦ To date of actual delivery  Failure to exercise due diligence shall pay a civil penalty not more than $50 for each account

TRMG_ VIRGINIA cont’d PENALTIES AND INTEREST UPON FAILURE TO PAY OR DELIVER UNCLAIMED PROPERTY  Failure to file report  File false report  Fails to perform any other Duty ◦ Civil Penalty of $100 for each each report not filed or other duty not performed ◦ UP TO a maximum of the lesser of $10,000 or 25% of the value of the property which should have been but was not reported

TRMG_ VIRGINIA PENALTY UPON WILLFUL FAILURE TO FILE REPORT OR DELIVER PROPERTY  $1,000 per day up to ◦ a maximum of the lesser of $50,000 or ◦ 100 percent of the value of property not paid or delivered until the property is paid or delivered ◦ FOR GOOD CAUSE PENALTY MAY BE WAIVED

TRMG_ VIRGINIA PENALTY UPON A FRAUDULENT REPORT  $1,000 per day up to ◦ a maximum of the lesser of $50,000 or ◦ 100 percent of the value of property not paid or delivered until the property is paid or delivered ◦ FOR GOOD CAUSE PENALTY MAY BE WAIVED ◦ Same as for willful failure