What To Do With Unclaimed Property and How To Search For Your's
As a Delaware business attorney, part of my responsibility to my clients is to help them avoid legal problems. A legal check-up or legal audit can save a business owner a lot of time, money and aggravation in the long run if we can identify potential problems and deal with them before they get out of hand. In this series of articles, I’ll address various areas that appear on my legal audit checklist.
In this article, let’s discuss the topic of “escheat.” It turns out that many business owners are unfamilar with the concept of escheat, and they don't realize that they have a legal obligation to report and turn over to the Delaware Division Revenue abandoned or unclaimed property in their possession.
Like other states, Delaware has an unclaimed property law. There are lots of examples of unclaimed property. For instance, you issue a paycheck to an employee who has resigned, but the employee never cashes the check. Or you have a bank account that’s been dormant for several years. Or you send a supplier a check and the check is never cashed. The list also includes uncashed dividend checks, uncashed refund checks, unclaimed insurance proceeds, and stocks and bonds. In addition, if a person dies without a will and there are no known heirs, the deceased’s property is considered abandoned and unclaimed.
Once these funds or assets have been unclaimed for a period of 5 years, they're generally considered abandoned. Businesses with abandoned property have to send written notice to the last known address of the owner. If the abandoned proeprty remains unclaimed, a business has a legal obligation to report it to the State and turn it over to the Division of Revenue. Failure to comply carries stiff penalties.
The legal process whereby the government takes control of the money or assets is known as “escheat.”
Here’s the interesting part. You can search whether any state or even the federal government is holding funds or property that belong to you. In this regard, on October 31st, 2008, the Delaware Division of Revenue published in the News Journal and the Delaware State News the names of approximately 75,000 owners of unclaimed property in Delaware.
Delaware has a searchable database that lists owners who have a last known address in Delaware. There is even a national database that gives you the ability to search for assets that belong to you in other states.
