Tuesday, January 24, 2012

SALT To Taste:
Unclaimed Property: Getting Your Priorities Straight

Kellie Lanford; Marshal Kline

All fifty states in addition to the District of Columbia, Puerto Rico, and the U.S. Virgin Islands have unclaimed property laws. These laws require holders of unclaimed property to report and remit such property to the state (after a prescribed period of time has elapsed) until the owner of such property can be located. Unclaimed property is generally remitted to a state based upon the “first” and “second” priority rules that were established under Texas v. New Jersey. Pursuant to these rules, the state of the last known address of the owner, as shown by the holder’s books and records, has a first priority right to the unclaimed property. If the holder has no record of the owner’s last known address, or if the last known address is in a state that does not provide for the escheatment of the abandoned property, then the holder’s state of incorporation has a second priority right to that unclaimed property.

If these rules are as simple and straightforward as they seem, why is there always controversy in this area? Do states have the authority to escheat unclaimed property under other priority schemes? If so, should holders be concerned?

Find out these answers and more by reading the full newsletter here.

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