If you haven’t worked with abandoned and unclaimed property for a long time, one of the most confusing parts of your job could be sorting out all the different codes required in unclaimed property reports. It seems simple: just use the code each state requires for the type of property you are escheating. Easy, right? Well…sort of.
Before we get to that, let’s review what makes up a code and where the codes come from.
Codes are made up of two alphabet characters followed by numeric characters. The alpha characters identify the property category. There are 10 original categories and three new categories:
CT: court funds
MI: mineral interests
SD: tangible property
TR: trust property
ZZ: all other
CS: educational savings accounts (new)
HS: health savings accounts (new)
IR: individual retirement accounts (new)
Codes are usually published by the states in holder manuals, along with dormancy periods associated with each property type. A dormancy period indicates the number of years from the date of last contact with the property owner after which the property is considered to be “abandoned” and must be reported and escheated to the states.
Before the 1990s, there was not a centralized effort to standardize property type codes for unclaimed property. Each state used its own codes. Then, the National Association of Unclaimed Property Administrators (NAUPA) stepped in and created an initial list of standard codes. The NAUPA list of unclaimed property type codes is periodically updated to reflect new property types.
This list is only a recommendation of codes the states can use if they want to. However, as time has progressed, an increasing number of states have made an effort to use the NAUPA codes. NAUPA also provides other codes for unclaimed property reporting: Relationship Type, Owner Type, Deduction, Addition, Paid or Deletion, Security Delivery, Country and NAICS — all codes required by most states.
In spite of this standardization effort, it has been estimated that there are actually three times as many property type codes circulating among the states as there are codes recommended in the NAUPA standard code list. Only about a third of the total number of codes being used are used consistently in 10 or more states. To make matters worse, it is estimated there are more than 1,000 different property type code descriptions being used by the states.
A couple of different aspects of codes used in unclaimed property reporting can cause some confusion.
This might happen, for example, when a state uses older data systems with codes not matching the NAUPA list. The state administrator might decide to continue using old codes until the state data system is updated.
Some states may have specific property types not used in other states. When new types of property arise, such as digital currency, states may create a code until one is recommended by NAUPA. In situations like this, when a state’s property types aren’t included on the NAUPA list, it’s possible two states could have two different codes for the same property type.
There are many different types of financial tools used to contain property, some with blurry lines between types. One state may define a particular type of property in a different way from other states. This can result in the use of different codes.
We know this all can seem very confusing, but it leads to a simple conclusion. To report properly in all applicable states, simply follow each state’ s holder manual or other published guidelines. If it’s not obvious which codes to use, consult with that particular state administrator. Unclaimed property advisors communicate often with state administrators, and also can provide advice.
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