CaseMark Escheatment and Unclaimed Property Policy
Drafts a governance policy for systematic compliance with all 50 states' unclaimed property (escheat) laws, from identification through remittance and audit defense.
Prerequisites
- Organizational footprint — states of incorporation, operation, and property-holding
- Property type inventory — all property categories held (deposits, checks, securities, credits, gift cards, etc.)
- Existing compliance artifacts — prior reports, audit correspondence, VDA agreements
- Designated policy owner — CFO, General Counsel, or Compliance Officer with escheat authority
- Industry context — financial services, insurance, utilities, or retail (drives property-type rules)
Research step: Search uploaded org documents for existing policies, prior reports, and audit history before drafting. Supplement with current state statutory requirements for all jurisdictions in the org's footprint.
Quick Start
- Gather prerequisites (footprint, property inventory, existing artifacts)
- Build dormancy period matrix for each state × property type
- Draft policy sections in order: governance → identification → dormancy → priority rules → due diligence → reporting → recordkeeping → audit preparedness
- Validate all state-specific periods and thresholds against current statutes
- Route for CFO/GC approval; schedule annual review cycle
Core Workflow
1. Purpose and Governance
| Element | Content |
|---|---|
| Scope | All 50 states + D.C. + applicable territories; all units holding third-party property |
| Policy owner | Named role with authority to interpret, grant exceptions, coordinate audits |
| Stakeholders | Business units (identify), Accounting (report/remit), Legal (guidance), Internal Audit (verify) |
| Review cycle | Annual minimum; triggered updates on legislative changes |
2. Property Identification
| Property Type | Review Freq. | Dormancy Trigger | Notes |
|---|---|---|---|
| Demand/savings accounts | Quarterly | Last owner-initiated contact | Interest credits, fee debits ≠ owner contact |
| Time deposits | Quarterly | Maturity date + dormancy period | — |
| Uncashed checks (payroll) | Monthly | Date of issuance | Often 1–3 yr dormancy |
| Uncashed checks (vendor/refund) | Quarterly | Date of issuance | — |
| Securities / dividends | Quarterly | Last owner activity or uncashed distribution | Includes street name, DRIP, fractional shares |
| Customer credits / overpayments | Quarterly | Date credit created | Includes utility deposits, insurance overpayments |
| Gift cards / stored value | Quarterly | Last redemption activity | CARD Act: no expiration < 5 yrs; state exemptions vary |
| Insurance proceeds | Per policy terms | Date payable or last owner contact | — |
| Safe deposit box contents | Annually | Lease expiration + dormancy period | — |
- Flag items within 6 months of dormancy threshold for due diligence prep
- Exclude property below de minimis thresholds, property under valid liens, legally exempt instruments
3. Dormancy Period Matrix
Maintain a living matrix (update annually): rows = property types, columns = state jurisdictions, cells = dormancy period (years) + statute citation.
| Property Type | Typical Range | Common Period |
|---|---|---|
| Bank accounts | 3–7 yrs | 5 yrs |
| Wages / payroll | 1–3 yrs | 1–2 yrs |
| Uncashed checks | 1–5 yrs | 3 yrs |
| Securities | 3–5 yrs | 3 yrs |
| Insurance proceeds | 3–5 yrs | 3 yrs |
| Gift cards | 1–7 yrs | 5 yrs (many states exempt) |
4. Jurisdictional Priority Rules
Apply the Supreme Court priority hierarchy (Texas v. New Jersey, 379 U.S. 674 (1965); Pennsylvania v. New York, 407 U.S. 206 (1972) [VERIFY citations]):
- First priority: State of owner's last known address
- Second priority: State of holder's incorporation (intangible) or state where property is held (tangible) — applies when no address known, address outside US, or address invalid
| Scenario | Rule |
|---|---|
| Wages | Employee's last known address state |
| Insurance proceeds | Insured's last known address state |
| Business entity owner | Entity's state of incorporation or principal place of business |
| Unknown/foreign address | Holder's state of incorporation |
| Multi-state claims | Follow priority hierarchy; document analysis; escalate to legal |
5. Due Diligence
Notice thresholds (verify per state):
| Threshold | Typical Requirement |
|---|---|
| ≥ $50 | Some states require notice |
| $50–$250 | Most states require written notice |
| All amounts | Some states (e.g., California [VERIFY]) require notice regardless |
Timing: 60–120 days before report due date (some states require up to 240 days).
Notice must include: statement of held property; property description (account, type, value); claim instructions; response deadline; org contact info; plain language tone.
Retain: copies of notices, mailing dates/addresses, returned mail with USPS notations, owner responses, reunification records.
Returned mail: Use address verification services, review other org records, search public databases. Document all attempts.
6. Reporting and Remittance
Compliance calendar (work backward from each state deadline):
| Milestone | Timing |
|---|---|
| Property identification complete | 180 days before deadline |
| Due diligence notices sent | 60–240 days before (state-specific) |
| Report compilation & reconciliation | 45 days before |
| Internal review & approval | 30 days before |
| Submission & remittance | On or before deadline |
Filing deadlines: Most states March 1 – November 1 annually. Maintain per-state calendar.
Report checklist: property aggregated by state per priority rules; categorized per state property-type codes; owner data complete (name, address, type, last contact, value, SSN/TIN); NAUPA II format (or state-specific portal); interest calculated where required; reconciled to accounting records; CFO/GC sign-off obtained.
Remittance: EFT (cash), DTC/certificate (securities), physical delivery (tangible). Retain confirmations and state acknowledgments.
Amended reports: File promptly on discovering material errors; document basis; obtain same approval as original.
Voluntary disclosure: When prior-year non-compliance found, engage counsel to evaluate VDA options (reduced look-back, penalty/interest waivers) before self-reporting.
7. Recordkeeping
| Record Category | Retention | Notes |
|---|---|---|
| Property records | 10 yrs from report date | Some states audit 10+ yrs back |
| Due diligence documentation | 10 yrs from report date | Notices, responses, reunifications |
| Filed reports & remittances | 10 yrs from report date | Include state acknowledgments |
| Audit correspondence & settlements | Permanent | — |
Ensure electronic records remain accessible through system migrations with backup copies and audit trails.
8. Audit Preparedness
| Role | Responsibility |
|---|---|
| Audit Coordinator | Primary state contact; document coordination; strategy |
| Legal Counsel | Privilege review; assessment challenges; settlement negotiation |
| Business Unit Managers | Produce records on request |
| Senior Management | Approve settlement positions |
Audit lifecycle: scoping (establish privilege boundaries) → document production (log all productions) → conferences (document communications) → work paper review (challenge unsupported findings) → assessment negotiation → appeal (evaluate for strong grounds).
9. Continuous Improvement
- Annual compliance review: error rates, audit findings, late filings
- Monitor proposed legislation in key jurisdictions
- Train personnel on policy updates within 30 days of material changes
- Update dormancy matrix and compliance calendar annually
Pitfalls and Checks
- Always verify current dormancy periods and notice requirements against state statutes — this policy is a framework, not a substitute for jurisdiction-specific legal review
- Priority rules govern: Apply Texas v. New Jersey hierarchy every time; never default to holder's state
- Owner-initiated contact only: Bank fees, interest credits, and automated statements do not reset dormancy
- VDA before audit: Evaluate voluntary disclosure before a state-initiated audit forecloses the option
- 10-year retention floor: Some high-risk states may warrant longer
- CARD Act: Gift card provisions must comply with federal law (no expiration < 5 yrs) and state exemptions
- Industry-specific rules: Financial services holders must verify special rules for securities, insurance, and custody property per state
- [VERIFY]: Confirm all statutory and case citations against current law before finalizing