Key Concepts for the Savvy Exec: Delaware Unclaimed Property Law
Key Concepts for the Savvy Exec: Delaware Unclaimed Property Law
As a business entity, your organization should be aware of the unclaimed property laws specific to the state in which you conduct business. In general, unclaimed property is a debt or obligation that has not been collected by the recipient after a prescribed time period. This could take the form of an uncashed payroll check you have issued to an employee or a dividend check sent to a shareholder that remains outstanding.
Several possible reasons can account for this property remaining unclaimed. Perhaps the recipient has already moved when a check reaches a previous address; maybe the owner changed her name due to marriage or divorce, and cannot legally claim the property. And in some cases, the unfortunate fact is that the owner of the unclaimed property is deceased.
Key Concepts of Delaware Unclaimed Property Law
In the state of Delaware, some of the legally defined examples of abandoned property are:
Any legacy, residue of a personal estate paid into the Court of Chancery by an administrator or trustee because the person entitled thereto was not found nor made claim to the property for a 5-year period
Any money or property held by the Court of Chancery for distribution to a shareholder, owner or creditor for which no claim or request for payment has been made by the entitled person within a 5-year period
Any amounts held or owing by a banking organization for the payment of negotiable documents such as a certified check that has been outstanding for a period of 5 years from the date of its issuance.
Any surplus amounts resulting from the bank’s sale of the contents of an abandoned safe deposit box
Reporting abandoned or unclaimed property is mandated by state law. Whether your organization is a business, a county court, or a banking institution, the office of the State Escheator requires that you report those goods and funds that quality as unclaimed in an annual statement. Your organization must then turn these over to the Escheator’s office which will then hold and distribute them to claimants as the law prescribes.
Are you interested in finding missing participants, terminating a 401K plan or about in general? KeaneCo has been helping businesses comply with abandoned property laws and helping to locate missing participants for over 30 years. Contact them today and get expert help with unclaimed property reporting, compliance, and audit prevention.
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