We are going through our list of inactive accounts under the new Illinois unclaimed property law. If a customer with inactive accounts is either the authorized signer on an active checking account or a beneficiary on an active payable on death account, can we treat the customer’s “inactive” accounts as active? Also, if we have a POD account with one mailing address for the owner and a different mailing address for the beneficiary, can we treat this POD account as linked to the beneficiary’s other accounts (which use the beneficiary’s mailing address) for purposes of the unclaimed property law?

We believe that a beneficiary should be treated as an apparent owner of the active account, but not an authorized signer.

The Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA) provides that activity directed by “an apparent owner” for an account “shall be an indication of interest in all such accounts” — provided that such accounts share the same mailing address in your institution’s books and records. The Illinois RUUPA defines “apparent owner” as a person appearing on your books and records as the owner of an account, and it defines “owner” as any “person that has a legal, beneficial, or equitable interest in property.” In other words, activity directed by an apparent owner counts as an indication of interest in all accounts in which that apparent owner has a legal, beneficial, or equitable interest, provided that the relevant accounts share the same mailing address.

If a customer is listed as a beneficiary on an active checking account, the customer is an “apparent owner” of those active accounts, because a beneficiary would have a beneficial interest in the active account. If the mailing addreses are the same, we believe that both accounts should be treated as active.

On the other hand, if a customer is merely an authorized signer for an active checking account, we do not believe that the customer should be treated as an “apparent owner” of the active checking account. An authorized signer for a deposit account does not have a legal, beneficial, or equitable interest in the deposit account. Consequently, activities on this deposit account should not be treated as activities on the authorized signer’s individual account.

As to your final question, we believe that the POD account should be treated as linked to the beneficiary’s other accounts, because the beneficiary is an “apparent owner” of all of these accounts. In other words, as long as one mailing address for the POD account matches the mailing address for the individual’s other accounts, they all can be treated as linked accounts for purposes of that POD’s beneficiary.

For resources related to our guidance, please see:

Illinois RUUPA, 765 ILCS 1026/15-210(f) (“If the apparent owner has another property with the holder to which Section 201(6) applies, then activity directed by an apparent owner in any other accounts, including loan accounts, at a financial organization holding an inactive account of the apparent owner shall be an indication of interest in all such accounts if:
- (A) the apparent owner engages in one or more of the following activities:
- - (i) the apparent owner undertakes one or more of the actions described in subsection (b) of this Section regarding any account that appears on a consolidated statement with the inactive account;
  - (ii) the apparent owner increases or decreases the amount of funds in any other account the apparent owner has with the financial organization; or
  - (iii) the apparent owner engages in any other relationship with the financial organization, including payment of any amounts due on a loan; and
- (B) the foregoing apply so long as the mailing address for the apparent owner in the financial organization’s books and records is the same for both the inactive account and the active account.”)

Illinois RUUPA, 765 ILCS 1026/15-210(b) (“Under this Act, an indication of an apparent owner’s interest in property includes: . . . (5) a deposit into or withdrawal from an account at a financial organization, except for a recurring Automated Clearing House (ACH) debit or credit previously authorized by the apparent owner or an automatic reinvestment of dividends or interest; . . .”)
Illinois RUUPA, 765 ILCS 1026/15-102(3) (“‘Apparent owner’ means a person whose name appears on the records of a holder as the owner of property held, issued, or owing by the holder.”)
Illinois RUUPA, 765 ILCS 1026/15-102(21) (“‘Owner’, unless the context otherwise requires, means a person that has a legal, beneficial, or equitable interest in property subject to this Act or the person’s legal representative when acting on behalf of the owner. . . .”)