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KeepUP™ Blog

11/18/22 8:39 AM

Unclaimed Property Legislative Updates in Washington and Maryland

With 2023 right around the corner, we wanted to call your attention to new changes to the unclaimed property laws in Washington and Maryland.

WA S 5531

Washington joins the RUUPA states (states that model their unclaimed property laws on the 2016 Revised Uniform Unclaimed Property Act), with WA S 5531, effective on January 1, 2023. Here is a summary of the key changes:

While dormancy periods generally remain the same, it is important to review property types and trigger dates for escheatment, as those have changed for some property types. All holders should note that that Washington, like other RUUPA states, introduces new property types eligible for escheat, including health savings accounts and custodial accounts, and while a specific dormancy period for virtual currency is not included, the term is defined. Generally, the new provisions follow RUUPA, except Washington uses the current federal RMD age of 72 in the retirement provision.

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Topics: Compliance, Reporting

10/5/22 11:13 AM

Help Your Company Avoid Unclaimed Property Asset Recovery Scams

Amounts owed to your organization (unclaimed property) can go unclaimed for a myriad of reasons.  Your company could have moved locations.  You could have changed your process or contact point for payment receipt.  A check could literally be lost in the mail.  Once items are lost and go unreconciled, they turn into unclaimed property. Unclaimed property can be funds held by a state/jurisdiction resulting from statutory escheat requirements or they can be outstanding balances held by a government entity (that will never be escheated) until you or your organization come forward.

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Topics: Best Practices, Corporate Asset Recovery

9/14/22 2:22 PM

CA AB 2280, Containing Voluntary Compliance Program, Signed by Governor

California AB 2280 was signed by Governor Gavin Newsom on September 13, 2022 and becomes effective on January 1, 2023.

Holders have been closely following CA AB 2280, as it authorizes the Controller to establish a voluntary compliance program (“VCP”), which would allow holders to voluntarily report and remit past due property. Holders that are eligible for the program and successfully complete the requirements outlined in the bill would receive a waiver of the mandatory 12% interest assessed on late property reported to California.

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Topics: Compliance, California, Audit, Voluntary Disclosure Agreements

8/23/22 8:32 AM

Delaware Actively Mailing Notices Requesting Verified Reports

We recently discussed in a previous blog post that DE SB 281, enacted and made effective on June 30, 2022, among other things, expands the state’s enforcement powers by allowing the State Escheator to request a verified report or compliance review from a holder for any reason. Prior law required the State Escheator to have “reason to believe” that the holder failed to file a report, or who the State Escheator believed had filed an inaccurate, incomplete, or false report.

Holders are presently receiving notices requesting verified reports for the prior report year, even if they did not have any unclaimed property to report for that year. Under Delaware law, a negative report, or “zero report” is not required.

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Topics: Delaware, Audit, Voluntary Disclosure Agreements

8/12/22 9:03 AM

Risks of Noncompliance with Unclaimed Property Laws Do Not Stop at Audit

The states continue to enforce their unclaimed property laws using the following familiar methods:

• Single and multistate audits, often run by various third-party audit firms

VDA invitation letters (e.g., Delaware, resulting in referral for audit if a response is not received within 90 days)

• Compliance reviews and requests for verified reports (e.g., Delaware)

• Self-audit notification letters (e.g., Illinois)

•Questionnaires regarding the holder’s unclaimed property compliance (e.g., New York)

The states can also subject holders to litigation under their unclaimed property laws and False Claims Acts by alleging that a holder has knowingly failed to file reports in accordance with that state’s unclaimed property law. As the number of actions similar to those mentioned below increases, it is ever crucial to have a robust unclaimed property compliance program, one that includes documented policies and procedures and relates to key areas such as due diligence, reporting and record retention.

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7/19/22 9:02 AM

Reminder: Delaware VDA Invitations Scheduled to Mail July 22, 2022

The Delaware Secretary of State (SOS) has indicated its intent to mail the latest round of VDA invitations on or around July 22, 2022.  Under Delaware law, the state cannot initiate an unclaimed property examination (audit) unless a company has first been notified in writing by the SOS that it may enter the SOS VDA Program. Holders who do not enroll in the VDA Program within the 90-day notice period set forth in the letter will be referred to the Department of Finance for an unclaimed property audit.

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Topics: Delaware, Voluntary Disclosure Agreements

7/6/22 9:24 AM

DE SB 281, Enacted and Effective June 30, 2022: What Holders Need To Know

Enacted and made effective on June 30, 2022, Delaware SB 281 makes significant changes to Delaware’s unclaimed property law. Holders currently under audit or who are participating in a voluntary disclosure program (VDA) with Delaware’s Secretary of State (DE SOS), as well as holders in litigation should take note that many of these new provisions apply retroactively.

Below is a summary of the key provisions:

Enforcement: Verified Reports and Compliance Reviews

• While the Department of Finance is required to notify a holder of the opportunity to participate in the Secretary of State’s VDA program before it can initiate an audit, the new law allows the state to initiate an audit if a holder has not responded to or completed a verified report or compliance review, without requiring such notice.

• The state can request a verified report or initiate a compliance review for any reason, whereas prior to the new law, the state needed reason to believe that the holder had previously filed an inaccurate, incomplete, or false report.

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Topics: Delaware, Compliance, Reporting, Voluntary Disclosure Agreements, U.P. Law

6/30/22 12:29 PM

Update: Delaware VDA Invitations To Mail On Or About July 22, 2022

The Delaware Secretary of State (SOS) has indicated its intent to mail the latest round of VDA invitations on or about July 22, 2022.  Under Delaware law, the state cannot initiate an unclaimed property examination (audit) unless a company has first been notified in writing by the SOS that it may enter the SOS VDA Program. Holders who do not enroll in the VDA Program within the 90-day notice period set forth in the letter will be referred to the Department of Finance for an unclaimed property audit.

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Topics: Delaware

5/3/22 8:27 AM

WV H 4511 Enacted – Upcoming Changes for Fall 2022 Unclaimed Property Report

The West Virginia State Treasurer’s Office (WVSTO) recently confirmed that holders will need to follow the changes made to their unclaimed property law as a result of the passage of House Bill 4511, which becomes effective June 10, 2022, for the upcoming Fall reporting cycle.

This short turnaround time for holders to become compliant with the new law highlights the need for holders to actively monitor legislative, regulatory, and administrative activity.

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Topics: Compliance, Reporting

4/14/22 9:50 AM

Reduce Escheat Liability with Owner Reunification Programs.


If your organization places a value on customer retention and would like to reduce your overall escheatment and due diligence expenses, now is the time to commence an outreach program to dormant account owners. There is still time to make contact with customers prior to the fall escheatment cycle, and if you move quickly, you can also reduce your due diligence mailings expenses. 
 

Due diligence for the fall reporting cycle generally mails anytime from July – August. The due diligence mailing process cleans up a handful of accounts every escheat season – usually somewhere between 10 -20%. However, as the below chart demonstrates, a proactive outreach program that begins far in advance of the due diligence time frames can significantly reduce the population of accounts that are ultimately escheated.

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Topics: Due Diligence, Best Practices, Owner Reunification