Tag: uniform act

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.

Happy New Year – A Look At 2016

Welcome to 2016.  What unclaimed property issues will come up over the next 365 (actually, 366) days?  While you can never be sure, here are some stories that we will be keeping an eye on.

Lawsuits, Lawsuits, Everwhere — More and more holders are challenging state audit procedures, practices, and results.  The Unclaimed Property Professionals Organization has a great roundup that we needn’t repeat here, but cases are pending challenging Delaware’s estimation techniques (Temple Inland v. Cook), the legality and use of gift card subsidiaries (French v. Card Compliant), federal preemption (National Freight v. Sidamon-Eristoff), and a variety of other issues.  A decision in any one of these cases could have a significant effect on unclaimed property practices.

Revision to the Uniform Unclaimed Property Act — The Uniform Law Commission of the National Conference of Commissioners on Uniform State Laws is continuing its efforts to revise the Uniform Unclaimed Property Act.  For a primer about the who, what, where, when, and why of the revision effort, see our previous post here.  The next meeting of the committee is scheduled for late February in Dallas.

Owner Challenges to State Unclaimed Property Laws — While the historical justification for the state taking custody of unclaimed property for the rightful owner is the theory that the state “steps into the shoes” of the missing owner, some citizens are beginning to challenge the eagerness with which the state jumps into those shoes (sometimes while they are still being worn).  Lawsuits in Minnesota and Oklahoma are challenging the methods by which the state takes custody of unclaimed property or the actions that the state takes (or doesn’t take) to direct those funds to the rightful owner.