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3/13/19 8:12 AM

Unclaimed Property Regulations - What You Don't Know Can Hurt You

by Clive Cohen

Red Ring Binder with Inscription Compliance on Background of Working Table with Office Supplies, Laptop, Reports. Toned Illustration. Business Concept on Blurred Background.Many people are aware that all states and jurisdictions have abandoned property statutes.  These statutes are the basis for how holders report, what they report and various related matters.  A knowledge of these statutes can make the often-complex filing process a little easier to understand.

However, many unclaimed property statutes also include language permitting the state to make complimentary regulations that further define and explain issues that may not be specifically addressed in the statute.  States regularly update their regulations and these updates may not receive significant exposure. This lack of exposure may create problems for holders because an understanding of both statute and regulations is necessary for a holder to be confident that they are in compliance with a state’s unclaimed property requirements.

One recent example of a regulation occurred in December 2018, when Tennessee proposed a regulation that clarifies the obligations of both the Unclaimed Property Division and holders of unclaimed property. It rewrites pre-existing unclaimed property rules with updated provisions.  The purpose of these proposed rules is to bring the Unclaimed Property Division's rules into compliance with new statutory changes to the Tennessee Code Annotated since the Uniform Unclaimed Property Act was passed in 2017.  The document detailing the proposed regulations states: 

The probable effect of the rule on businesses is that companies holding unclaimed property will have greater clarity regarding how to report unclaimed property. The probable effect of the rule on consumers is that owners of unclaimed property will have greater clarity regarding how to claim their property.

While regulations may be administrative or clarifying in nature, they are still part of a state’s overall statutory framework.  It is important to note that a lack of knowledge of state regulations is not generally accepted by states as a satisfactory reason for a lack of compliance with respect to a state’s unclaimed property requirements. 

If you have doubt about how a statute or regulation can impact your compliance obligations, you should consider engaging with an unclaimed property professional advisor. They have the expertise and knowledge to help holders understand the requirements imposed by both state statutes and regulations and can recommend actions that need to be taken.   

Topics: Reporting, Best Practices