trmg october 10, 2011 wanda borges, esq. borges & associates, llc 575 underhill blvd. syosset,...
TRANSCRIPT
ESCHEATMENT[what to do with unclaimed property]
TRMGOCTOBER 10, 2011
WANDA BORGES, ESQ. BORGES & ASSOCIATES, LLC
575 UNDERHILL BLVD.SYOSSET, NY 11791516-677-8200 x 225
1TRMG_ 2011
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ESCHEATMENT
Origination stems from feudal England
Escheat was a privilege granted exclusively to the King to take the property of a person who died intestate (without a will)
Modern Day:◦Escheat is a power which each state has to
acquire title to property for which there is no owner
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UNIFORM UNCLAIMED PROPERTY ACT
Completed by the Uniform Laws Commissioners in 1995 ◦Superseded
Uniform Disposition of Unclaimed Property Act of 1954
Uniform Unclaimed Property Act of 1981. Adopted by:◦Alabama, Arizona, Arkansas, Hawaii,
Indiana, Kansas, Louisiana, Maine, Michigan, Montana, Nevada, New Mexico, North Carolina, U.S. Virgin Islands, Vermont, West Virginia
◦ Introduced in 2011 to Mississippi
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UNIFORM UNCLAIMED PROPERTY ACT
Even those states who have not adopted the UUPA have some version of an Abandoned/Unclaimed Property Statute
◦ Each state which has adopted the UUPA Has or will modify it to its own
requirements Statute may contain the words
Abandoned Property Unclaimed Property The word “escheat” is rarely used in the
statutes
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UNIFORM UNCLAIMED PROPERTY ACT
U.S. Supreme Court cases which lead to the creation of the Uniform Unclaimed Property Act
◦Texas v. New Jersey (1965)
◦Pennsylvania v. New York (1972)
◦Delaware v. New York (1993)
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UNIFORM UNCLAIMED PROPERTY ACT
U.S. Supreme Court cases clarified:
◦Unclaimed intangible property is payable to the state of the owner’s last known address
◦The state of the last known address can claim the abandoned property
◦ If no claim is asserted by that state, then it is payable to the state of the holder of the property
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PROPERTYDEFINED BY THE UUPA
Tangible property (that held in a safe deposit box or other safekeeping depository
Intangible property held, issued, or owed ◦ in the course of the holder’s business –
OR – ◦By a government, governmental
subdivision, agency, or instrumentality – AND
◦All income or increments therefrom
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EXAMPLES OF UNCLAIMED PROPERTY
Money (checks, drafts, dividends) Credit Balances Deposits Uncashed money orders Traveler’s checks Expense Reimbursement checks Payroll checks Commission checks Rebates
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PRESUMPTION OF ABANDONMENT UNDER THE UUPA
Property is presumed abandoned if it is unclaimed by the apparent owner during the times set in the UUPA
Pertinent times:◦Money or credits owed to a customer as a
result of a retail business transaction – 3 yrs
◦Wages or other compensation for personal services – 1 yr
◦All other property – 5 yrs
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UNCLAIMED PROPERTY UNDER THE UUPA
Property is unclaimed if, for the applicable period set forth, the apparent owner has not communicated in writing or by other means reflected in a contemporaneous record prepared by or on behalf of the holder, and has not otherwise indicated an interest in the property
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REPORTING REQUIREMENTS UNDER THE UUPA
Description of the property Name, last known address SS number or taxpayer id number The date, if any, on which the
property became payable, demandable, or returnable, and the date of the last transaction with the apparent owner of the property
Other information required by Rule
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FILING REQUIREMENTS UNDER THE UUPA
Report must be filed before November 1 of each year
Report must cover 12 months next preceding July 1 of that year
CAVEAT – remember this is the rule under the UUPA – each state WILL DIFFER
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NOTIFICATION REQUIREMENTS UNDER THE UUPA
Written Notice must be sent to the apparent owner◦Not more than 120 days◦Not less than 60 days◦Before filing report
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NOTIFICATION REQUIREMENTS UNDER THE UUPA
Notice must advise
◦ that the holder is in possession of abandoned property
◦ that address for apparent owner is holder believes to be accurate
◦The claim of apparent owner is not barred by a statute of limitations
◦The value of the property is $50 or more [Most state statutes use a $25 minimum]
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PENALTIES AND INTEREST UPON FAILURE TO FILE REPORT Interest accrues at rate of EITHER◦12% per annum◦2 percentage points above the annual
rate of discount in effect on the date the property should have been paid or delivered
Interest accrues on value of property from the date the property should have been reported, paid or delivered.
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PENALTIES AND INTEREST UPON FAILURE TO FILE REPORT
Civil Penalty of $200 for
◦each day the report, payment, or delivery is withheld – OR
◦The duty is not performed◦Up to a maximum of [$5,000] [subject to
periodic adjustment or state’s discretion]
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PENALTY UPON WILLFUL FAILURE TO FILE REPORT
WILLFUL failure to report, pay or deliver shall result in
◦Civil Penalty of [$1000] for each day the report, payment or delivery is withheld – OR the duty is not performed
◦Up to a maximum of [$25,000]
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PENALTY UPON FILING A FRAUDULENT REPORT
A holder who makes a fraudulent report shall pay, in addition to interest, ◦Civil Penalty of [$1000] for each day from
the date a report was due, ◦Up to a maximum of [$25,000]◦PLUS 25% of the value of any property
that should have been but was not reported
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GENERALLY
The Definition of Property does not change substantially when comparing the UUPA with various state statutes and therefore will not be outlined below.
Unclaimed Property must be delivered to the state which is the last known residence of the owner of the unclaimed or abandoned property
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DISCLAIMER
The information set forth below has been gathered from the various state statutes. This information is intended to present guidelines ONLY as to what each state statute provides and is presented for educational purposes. This information is NOT intended to be legal advice regarding any individual company reporting or not reporting unclaimed or abandoned property. Each company should rely on its own accountant or lawyer in determining what kind of reporting and to which state the reporting is required.
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FLORIDAREPORTING REQUIREMENTS
Description of the Property Name, last known address SS number or taxpayer id number Date of birth, if known, for individuals Evidence of diligence performed to locate
owner Other information required by Rule Value of unclaimed property > $50◦ <$50 may be reported in the aggregate◦ < $10 credit balances shall not be presumed to
be unclaimed
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FLORIDAFILING REQUIREMENTS
Report must be filed by May 1 of each year
Applicable to the preceding calendar year
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FLORIDANOTIFICATION REQUIREMENTS
Written Notice must be sent to the apparent owners
Notice to be sent to last known address Due diligence must be used to locate them◦Not more than 120 days◦Not less than 60 days◦Prior to filing required report
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FLORIDAPENALTIES AND INTEREST UPON
FAILURE TO FILE REPORT $500 per day up to a maximum of $5,000
and 25 percent of the value of property not
reported until a report is rendered for any person who willfully fails to render any report required under this chapter . ◦ If the holder acted in good faith and without
negligence, the department shall waive the penalty provided herein.
Interest at the rate of 12 % p.a. from the date such property shall have been paid or delivered. ◦ The department may waive any penalty due under
this subsection with appropriate justification.
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FLORIDAPENALTY UPON
WILLFUL FAILURE TO FILE REPORT
$500 per day up to a maximum of $5,000 and
25 percent of the value of property not paid or delivered until the property is paid or delivered for any person who willfully refuses to pay or deliver abandoned property to the department as required
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FLORIDAPENALTY UPON FRAUD
Any person who willfully or fraudulently conceals, destroys, damages, or makes unlawful disposition of any property or of the books, records, or accounts pertaining to property which is subject to the provisions of this chapter is guilty of a misdemeanor of the second degree, punishable as provided in s. 775.082 or s. 775.083.
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GEORGIADISPOSITION OF UNCLAIMED
PROPERTY ACT
All tangible and intangible property including any income or increment thereon, less any lawful charges, that is held, issued, or owing in the ordinary course of the holder's business and has remained unclaimed by the owner for more than five years after it became payable or distributable is presumed abandoned.
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GEORGIAREPORTING REQUIREMENTS
Description of the Property Name, last known address SS number or federal identification
number Date of birth, if known, for individuals Date when property became payable,
demandable, or returnable and the date of the last transaction with the owner
Other information required by Rule Value of unclaimed property > $50◦ <$50 may be reported in the aggregate
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GEORGIAFILING REQUIREMENTS
Report must be filed by November 1 of each year
Applicable to the preceding year as of June 30
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GEORGIANOTIFICATION REQUIREMENTS
Written Notice must be sent to the apparent owners
Communicate with the owner to prevent abandonment
Notice to be sent to last known address Due diligence must be used to locate them◦Not more than 120 days◦Not less than 60 days◦Prior to filing required report
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GEORGIAPENALTIES AND INTEREST UPON
FAILURE TO FILE REPORT
$100 per day up to a maximum of $5,000 and
25 percent of the value of property not reported until a report is rendered for any person who willfully fails to render any report required under this chapter .
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GEORGIA PENALTY UPON WILLFUL FAILURE
TO PAY OR DELIVER PROPERTY
A person who refuses after written demand by the Commissioner to pay or deliver
◦ Guilty of a misdemeanor
◦ Subject to fine not more than $1000
◦ Subject to a prison term of not more than six months
◦ OR Both
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GEORGIA
RECIPROCITY WITH OTHER STATES◦ Exchange information◦ Enable Georgia or Other State to:
Audit Otherwise determine Unclaimed/Abandoned Property $100 per day up to a maximum of $5,000 and
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MINNESOTAREPORTING REQUIREMENTS
Description of the Property Name, last known address Nature & Identifying Number Evidence of diligence performed to locate
owner Other information required by Rule Value of unclaimed property > $100
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MINNESOTAFILING REQUIREMENTS
Report must be filed by November 1 of each year
Applicable to the preceding year as of June 30 of that year
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MINNESOTANOTIFICATION REQUIREMENTS
Written Notice must be sent to the apparent owners
Notice to be sent to last known address Due diligence must be used to locate them◦Not more than 120 days◦Prior to filing required report
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MINNESOTAINTEREST UPON FAILURE TO PAY
OR DELIVER UNCLAIMED PROPERTY Upon failure to pay or deliver unclaimed
property by the date set
Interest at the rate of 12 % p.a. on the value of the unclaimed property
From the date of written demand by the Commissioner
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MINNESOTA PENALTY UPON WILLFUL FAILURE TO FILE REPORT or PAY OR
DELIVER UNCLAIMED PROPERTY
Any person who willfully refuses to file a report shall be guilty of a Misdemeanor◦ Fine of not more than $1000◦ Imprisonment of not more than 90 days◦ OR Both
Any person who willfully refuses to pay or deliver abandoned property to the department as required shall be guilty of a Gross Misdemeanor◦ Fine of not more than $3000◦ Imprisonment of not more than 1 year◦ OR Both
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OHIOSTATUTE
Unlike most other states the Statute governing Unclaimed Funds in Ohio is simply called
UNCLAIMED FUNDS
It is found in Ohio Revised Code §169
GENERALLY Period of time for property to be unclaimed and deemed abandoned is 5 years
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OHIOREPORTING REQUIREMENTS
Description of the Property
Name, last known address
Nature of property & identifying number
Social Security number, if an individual
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OHIOREPORTING REQUIREMENTS
If value of unclaimed property >$1000◦ Statement of Efforts to locate owner◦ Documentation will be maintained by holder for 5
years Other information required by Rule Value of unclaimed property< $50◦ <Each category of items of unclaimed funds◦ The number of items in each category◦ The aggregate value of unclaimed funds
Report must contain information as to due diligence to locate owner
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OHIOFILING REQUIREMENTS
Report must be filed by November 1 of each year
Applicable to the preceding calendar year as of June 30th
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OHIONOTIFICATION REQUIREMENTS
Written Notice must be sent to the apparent owners of property having a value of $50 or more
Due Diligence includes:Internet Searchmanual search of public recordsNotification to last known address of owner
Notice to be sent to last known address◦ 30 days prior to filing required report ◦ By U.S. mail if value is = to or >$50 but <$1000◦ By certified mail, RRR, if value is $1000 or more
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OHIOPENALTIES AND INTEREST
VIOLATION OF 169.10 OF STATUTE
Knowingly Fails to File Report Knowingly Fails or Refuses to Pay or Deliver
Unclaimed Funds Not more than $500 per day ◦ For each day of continued violation◦ Each day of non-compliance is a separate violation
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PENNSYLVANIAREPORTING REQUIREMENTS
Description of the Property Name, last known address Nature and identifying number Date when property became payable,
demandable or returnable Date of last transaction with owner Other information required by Rule Value of unclaimed property > $50◦ <$50 may be reported in the aggregate
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PENNSYLVANIAFILING REQUIREMENTS
Report must be filed by April 15 of each year
Applicable to the preceding calendar year
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PENNSYLVANIAPENALTIES AND INTEREST UPON
FAILURE TO FILE REPORT
$1000 per day up to a maximum of $10,000 and ◦ If the holder acted in good faith and without
negligence, the department shall waive the penalty provided herein.
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PENNSYLVANIA PENALTY UPON REFUSAL TO FILE REPORT OR
DELIVER ABANDONED PROPERTY
Misdemeanor Fine or not less than $1000 and not more
than $10,000 – OR Imprisonment for not more than 24 months OR BOTH
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TEXAS
Texas Personal property is presumed
abandoned if, for longer than three years: ◦ the existence and location of the owner of
the property is unknown to the holder of the property; and
◦according to the knowledge and records of the holder of the property, a claim to the property has not been asserted or an act of ownership of the property has not been exercised.
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TEXASREPORTING REQUIREMENTS
Description of the Property Name, last known address SS number or taxpayer id number Date property became payable,
demandable, or returnable Date of last transaction with property
owner Other information required by Rule Value of unclaimed property > $50◦ <$50 may be reported in the aggregate
Without furnishing any of the above required information
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TEXASFILING REQUIREMENTS
Report must be filed by November 1 of each year
Property held as of June 30
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TEXASRECORD RETENTION REQUIREMENTS
Any person required to file a Report must maintain◦ For 10 years◦ Information contained on the reports◦ Regardless of whether amounts are reported in the
aggregate
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TEXASPRIVATE ESCHEAT AGREEMENTS PROHIBITED
Texas Statute 74.309 prohibits Any person…business…corporation…from
entering into any private agreement relating to escheatment of unclaimed/abandoned property
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TEXASPENALTIES AND INTEREST UPON
FAILURE TO PAY OR DELIVER UNCLAIMED PROPERTY
10 percent of the value of the unclaimed/abandoned property
◦ From Date property should have been turned over
◦ To Date on which property is actually turned over
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VIRGINIAREPORTING REQUIREMENTS
Description of the Property Name, last known address SS number or taxpayer id number Date of on which property became
payable, demandable, or returnable Other information required by Rule Value of unclaimed property > $100◦ <$100 may be reported in the aggregate
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VIRGINIAFILING REQUIREMENTS
Report must be filed by November 1 of each year
Applicable to the preceding calendar year as of June 30
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VIRGINIANOTIFICATION REQUIREMENTS
IF whereabouts of owner is known BEFORE filing report Communicate with owner and attempt to
prevent abandonment Due diligence must be used to locate owner
if value of property is >$100◦Not more than 60 days prior to report
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VIRGINIAPENALTIES AND INTEREST UPON
FAILURE TO PAY OR DELIVER UNCLAIMED PROPERTY
Interest at same rate as charged to delinquent taxes◦ From date property should have been delivered◦ To date of actual delivery
Failure to exercise due diligence shall pay a civil penalty not more than $50 for each account
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VIRGINIA cont’dPENALTIES AND INTEREST UPON
FAILURE TO PAY OR DELIVER UNCLAIMED PROPERTY
Failure to file report File false report Fails to perform any other Duty◦ Civil Penalty of $100 for each each report not filed
or other duty not performed◦ UP TO a maximum of the lesser of $10,000 or 25%
of the value of the property which should have been but was not reported
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VIRGINIAPENALTY UPON WILLFUL FAILURE TO FILE REPORT OR DELIVER PROPERTY
$1,000 per day up to ◦ a maximum of the lesser of $50,000 or
◦ 100 percent of the value of property not paid or delivered until the property is paid or delivered
◦ FOR GOOD CAUSE PENALTY MAY BE WAIVED