Unclaimed Property Auditor and Audits | Escheat | Liabilities that Companies owe to Individuals

When property is not in the hands of the rightful owner and it has not been abandoned, then it may be considered as Unclaimed Property.  The most common types of Unclaimed Property for which the relevant laws apply are the financial assets, not real or personal property.

These assets may typically include: funds related to lost paychecks, funds that remained in forgotten bank accounts, credit amounts from trade accounts, life insurance premium payouts, insurance premium refunds, securities from forgotten brokerage accounts, unclaimed or non-negotiated rebate checks, overpayments related to extinguished debts, etc. Generally, the determination to identify Unclaimed Property falls to the party in possession of the property and thus may be required to remit the property to the relevant state or other authority. In theory, the State becomes the custodian of the property subject to the claim of the rightful owner. If after a defined period of time the rightful owner does not claim the property, it may then escheat to the State.

Jurisidctions of Authority

There are the fifty states and various local and district authorities that create legislative authority regarding the treatment of Unclaimed Property.  Generally, Unclaimed Property laws in the United States provide for two reporting periods each year, whereby unclaimed bank accounts, stocks, insurance proceeds, utility deposits, un-cashed checks and other forms of "personal property" are reported first to the individual state's Unclaimed Property Office, then published in a local newspaper, and then finally the property is turned over to the State for safe keeping until its rightful owner makes a claim.

Finding Unclaimed Property
The states sponsor a free public site that reports only a portion of the unclaimed property available in the United States.  There are commercial sites as well that provide the same information or portions of the information for a fee.  Some consumer reporting sites conduct the research and assist consumers without charge or expense to the consumers.

Exposure Points for Businesses Regarding Unclaimed Property
The states are looking for various sources of revenue or funds that may be used to fill empty Treasuries.  Many states are expanding their Unclaimed Property laws to encompass more Unclaimed Property.  The exposure point for business is that the State Treasurer’s Office or Comptroller’s Office may request an appointment to come and conduct an audit of a Company’s assets in order to discover these assets.  These types of audits often are too liberal in their definition of Unclaimed Property and may require the escheatment of funds that normally may not need consideration.

NDB | Your Unclaimed Property Auditors and Audit Experts
We can facilitate your company’s self-assessment, discovery, documentation, and proper reporting of the results to the relevant authorities.  There needs to be a clear plan before these activities are undertaken; we can facilitate this through the development of a customized audit program and the proper scoping and matching of the relevant business activities to the presence and discovery of Unclaimed Property.  Also, given the proper circumstances, we can facilitate the notice to the rightful owners such that reporting to authorities may be avoided.

Uniformity Developments
National Conference of Commissioners on Uniform State Laws sought to address the problems arising from these types of property through provisions of the Uniform Unclaimed Property Act.  The Act was first drafted and promulgated in 1981, then revised in 1995.  The Act specifically focuses on the problem of unclaimed money in bank accounts and corporate coffers, and the escheatment thereof.

As a result of the Act, each state operates an Unclaimed Property fund in which the proceeds from abandoned bank accounts, unpresented checks, etc., are to be turned over to the state after a specified period of time.  Depending on state law, the money may be held either in perpetuity (i.e., the funds never escheat to the state; an example would be Texas), or after a long period of time (whereby it is presumed that the owner is deceased with no heirs), the funds will escheat to the state.  Due to the increasing mobility of the population, the vast majority of states have joined together to operate MissingMoney.com, a searchable database which lists unclaimed funds for several states.  Commercial websites, such as UnclaimedMoneyDB.com also exists to cover states not included.  A searchable database for unclaimed money and property is available in Canada from the Bank of Canada as well as LostCash.ca.

Contact Christopher Nickell, CPA, at 1-800-277-5415, ext. 706 or email him directly at This email address is being protected from spambots. You need JavaScript enabled to view it. to learn more about NDB's unclaimed property Audits and our services.

 

From I.T.consultants to seasoned regulatory compliance auditors, our firm's wide expertise is diverse, cross-functional, and highly experienced in all our service lines.

From I.T.consultants to seasoned regulatory compliance auditors, our firm's wide expertise is diverse, cross-functional, and highly experienced in all our service lines.