Embed Size (px)
Citation preview
Unclaimed PropertyReporting Basics 101
Fast Facts about Unclaimed Property
•All States, the District of Columbia, Puerto Rico,
and the U.S. Virgin Islands have Unclaimed
Property Programs
•Three Canadian Provinces (Quebec, British
Columbia and Alberta) have an Unclaimed
Property Program.
2
Fast Facts about Washington Unclaimed Property
•Over $1 billion received since 1955
•Holding over $750 million for lost owners
•Over $417 million returned to date
•1 in 5 chance of finding unclaimed property
•Program funded from receipts – no tax burden
3
History of Unclaimed Property
•Based on English Common Law
•WC Fields Law
•First Model Unclaimed Property Act in 1954
•Latest Washington Unclaimed Property Act 1981
4
Escheat vs. Unclaimed Property
Purpose of the Act
•Protect the property rights of the owner.
•Relieve holder from liability of the property
•Provide economic benefit to “all” citizens of the State, not individual holders.
5
Definitions•Holder
▪ Holding assets that the owner is entitled to
•Owner▪ Person whose name appears on the records of the holder as the person entitled to the assets held or issued by a holder
•Claimant▪ Person who is claiming the property
6
Benefits of the Act
•Maintains good customer relations.
•Keeps records current.
•Reunites property with owners.
•Reduces risk of audit findings.
7
Unclaimed Property Act•Duties of the State:
▪ Notify Owner (through advertisements, website, claim form mailings)
▪ Pay owner or heirs
▪ Keep records
▪ Safeguard property until claimed
8
Unclaimed Property Act
•Duties of the Holder
▪ Identify and protect property
▪ Notify owner (due diligence)
▪ Report and Remit property
▪ Retain Copies of Holder Reports
9
Rules of JurisdictionTexas vs. New Jersey (1965)
Primary Rule
▪ Property is reportable to the State of the owner’s last known address
Secondary Rule
▪ If the address is unknown, property is reportable to the holder’s State of domicile
10
11
Identifying Unclaimed Property
What kind of property might a holder have?
•Do you have employees? (payroll)
•Do you have retail customers? (credits, overpayments)
•Are you a utility? (deposits, refunds)
•Do you deal with patients? (overpayments, credits)
•Do you hold escrow accounts? (trust funds)
12
Examples of Intangible Property
•Bank Accounts
•Uncashed Checks and Money Orders
•Wages/Payroll
•Travelers Checks
•Stocks & Dividends
•Credit Balances
•Matured Life Policy Funds/Insurance Proceeds
•Refunds/Rebates
•Bail Bond Deposits
13
Examples of Tangible Property
•Jewelry
•Silver/Gold
•Monies (cash, coins)
•Antiques
•Collectibles
•Musical Instruments
•Toys/Video Games14
When Does Property Become Unclaimed?
15
Property becomes unclaimed when the owner:
•Has not communicated, in writing or by other means, with the holder regarding the property or the account in which the property is held for a specified period of time.
16
Actions that do NOT Prevent Abandonment•Automatic Payments
•Posting of Interest
•Absence of Returned Mail
•Service Charges
•Holder’s Awareness of Owner
17
18
Dormancy PeriodsCaution: May vary by state
Dormancy Holding Periods•Vary by property type and state receiving the report
•The end of a dormancy period is when property is reportable
•Most dormancy periods are 1,2,3 or 5 years
•Dormancy Periods vary among states
• Incidental Property
19
One Year Conversion TablePayroll & Utilities
Items that were issues or had a last activity date during:
Need to be reported on the report by:
7/1/03 thru 6/30/04 November 1, 2005
7/1/04 thru 6/30/05 November 1, 2006
7/1/05 thru 6/30/06 November 1, 2007
7/1/06 thru 6/30/07 November 1, 2008
7/1/07 thru 6/30/08 November 1, 2009
7/1/08 thru 6/30/09 November 1, 2010
7/1/09 thru 6/30/10 November 1, 2011
7/1/10 thru 6/30/11 November 1, 2012
20
21
Items that were issues or had a last activity date during:
Need to be reported on the report by:
7/1/02 thru 6/30/03 November 1, 2005
7/1/03 thru 6/30/04 November 1, 2006
7/1/04 thru 6/30/05 November 1, 2007
7/1/05 thru 6/30/06 November 1, 2008
7/1/06 thru 6/30/07 November 1, 2009
7/1/07 thru 6/30/08 November 1, 2010
7/1/08 thru 6/30/09 November 1, 2011
7/1/09 thru 6/30/10 November 1, 2012
Two Year Conversion TablePublic Agencies
22
Three Year Conversion TableMost Property
Items that were issues or had a last activity date during:
Need to be reported on the report by:
7/1/01 thru 6/30/02 November 1, 2005
7/1/02 thru 6/30/03 November 1, 2006
7/1/03 thru 6/30/04 November 1, 2007
7/1/04 thru 6/30/05 November 1, 2008
7/1/05 thru 6/30/06 November 1, 2009
7/1/06 thru 6/30/07 November 1, 2010
7/1/07 thru 6/30/08 November 1, 2011
7/1/08 thru 6/30/09 November 1, 2012
23
Items that were issues or had a last activity date during:
Need to be reported on the report by:
7/1/99 thru 6/30/00 November 1, 2005
7/1/00 thru 6/30/01 November 1, 2006
7/1/01 thru 6/30/02 November 1, 2007
7/1/02 thru 6/30/03 November 1, 2008
7/1/03 thru 6/30/04 November 1, 2009
7/1/04 thru 6/30/05 November 1, 2010
7/1/05 thru 6/30/06 November 1, 2011
7/1/06 thru 6/30/07 November 1, 2012
Five Year Conversion TableMoney Orders & Safe Deposit Box Contents
24
Effective Due Diligence
Due Diligence
•Due diligence is the process of attempting to
locate the owners of dormant property on a
holder’s books and records.
•The process is conducted by the company
holding the account – “Holder”
25
Due Diligence
•Due diligence is mandated by state law
•“Reasonable” efforts must be made to locate owners
26
Due Diligence Requirements
•Mailings
▪ For amounts $75 or greater
▪ Between May 1 and August 1 (prior to November 1 reporting)
▪ First class mailings to owners
▪ For owners with good addresses
•Put an annual reoccurring appointment on your electronic calendar - May
27
Why practice due diligence?
• Increased good will
•Reestablish communication with customer
•Good customer service
•Good business
• It’s the law
28
Tips to Increase Due Diligence Responses• Color coded return envelope for simplified processing
• Ensure outgoing envelope doesn’t look like “junk” mail
• Key words on the envelope
▪ Time sensitive
▪ Response Mandatory
▪ Unclaimed Funds/Money29
Tips to Increasing Due Diligence Responses• Short due date
▪ Administrators may have a certain number of days required to be given for a response
• Give response options: ▪ Fax▪ Mail▪ Telephone▪ E-mail
30
31
Preparing Your Report
When to Report?
• Reports are due by November 1st
• Put an annual reoccurring appointment on your electronic calendar - September
32
How to Report
•Electronic Reporting Software (Preferred)
▪ FREE at http://ucp.dor.wa.gov
▪ Click on “Are you holding Unclaimed Property? Report it to us.”
•Paper
▪ Forms can be accessed via our website at http://ucp.dor.wa.gov
▪ Click on “Are you holding Unclaimed Property? Report it to us.”
33
Common Reporting Errors
• Invalid Property Type Codes
• Invalid Date of Last Transaction
• Invalid Joint Owners/Relationship Codes
• Incorrect use of deduction code
• Payment does not match amount reported
• Incorrect Country Code
• Punctuation of any kind in the name fields
• Business Name is First and Last Name field (Should be in last name only)
34
Common Remittance Errors
•A check for each property on the report
▪ One check, one report
•Check made payable to the owner
▪ Make payable to Washington State Department of Revenue/UCP
•Remittance not included with the report
•Mailed to the incorrect address
35
Advantages of Electronic Reporting
•Accounts available to owners sooner
•Eliminates keying errors
•Data can be imported from Excel
•Produces due diligence letters and reports
•Accepted by all states
•Easier!
36
Develop a Strong Unclaimed Property System
•Prepare an unclaimed property manual
•Establish written procedures
•Conduct internal training, and cross train
• Identify personnel responsible for preparing reports
•Develop strong internal controls
•Utilize internal audit function
37
Online Help and Information
•Washington State:
▪www.ucp.dor.wa.gov
▪Forms and Publications
•Questions:
38
Q&A
39
40
Please complete a workshop evaluation
