Tag: securities

Arkansas Passes Law For Immediate Liquidation of Unclaimed Securities

Recently, we posted an article addressing the potential pitfalls to owners arising out of the states’ identification and handling of “unclaimed” securities accounts. In that article, we noted a bill pending in Arkansas legislature permitting the Administrator of unclaimed property in that state to sell escheated securities immediately upon receipt, instead of holding them for three years. That bill became recently became law.

The new law was also passed as an emergency measure meaning that the legislature made a determination that this new law was “immediately necessary for the preservation of the public peace, health, and safety.” Accordingly, the law became effective immediately upon its approval by the Governor on March 15.

Assuming that the state begins the practice of immediately selling securities reported to the state, it means that owners who later seek to recover their property from the state will not receive the securities — nor any of the dividends, splits, or other compensation that may have accrued after the shares were reported — but rather just the value of the securities at the time of liquidation, less any fees incurred by the state.

Friday Lost & Found

A Roundup of Odds & Ends From the Week in Unclaimed Property

GAO Issues Report on Unclaimed 401(k) Funds — The Government Accountability Office, which is responsible for providing recommendations to Congress on the responsibilities of the federal government, recently issued a report concerning the application state unclaimed property laws to retirement assets such as 401(k)s. In preparing the report, GAO sent questionnaires to the unclaimed property offices of all 50 states, interviewed industry representatives, and surveyed fund and brokerage firms on their handling of these items. Among the GAO’s recommendations are that the IRS clarify the tax treatment of plans that are escheated to the state and consider allowing taxpayers whose later claim assets that were unknowingly escheated to rollover the assets into a qualified plan.

Claim Headaches — One of the benefits of modern escheat laws is that they are generally “custodial” in nature — meaning that the state takes possession of unclaimed property on the owner’s behalf, but the property does not actually become the state’s property. That said, the claim process can be a trap for the unwary. As recounted by the Mercury News, individuals seeking to claim property from the state face (at least) paperwork and (at worst) scammers that try to take some or all of the money owed to the claimant. The article recounts these problems and has a number of tips for claimants. It is worth a review for those considering filing a claim.

2016 Uniform Act News — States continue to work on legislation relating to the 2016 Revised Uniform Unclaimed Property Act.The Washington state legislature is currently considering such a bill, as are lawmakers in Nevada. and South Carolina.