IBA Compliance Connection

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Do we have to treat accounts established under a court order as inactive when the court order prohibits withdrawals until the beneficiary reaches the age of majority? It seems counterproductive to send out inactive notices for these accounts when no activity can be conducted.

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No, we do not believe that your bank should treat these accounts as inactive. They will not be considered unclaimed property until three years after the account beneficiaries reach the age of majority, assuming the court orders establishing the accounts were entered pursuant to authority under either the Illinois Probate Act of 1975 or the Uniform Transfers to Minors Act (UTMA).

The new Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA) includes special provisions applicable to guardianship and custodial accounts for minors. If an account was established for a ward under the Illinois Probate Act of 1975, the account would not be presumed abandoned until “3 years after the minor attains legal age.” If an account was established under the UTMA, the account would not be presumed abandoned until three years after the beneficiary reaches the age of majority or mail is returned as undeliverable, whichever is later.

For resources related to our guidance, please see:

  • Illinois RUUPA, 765 ILCS 1026/15-204(d) (“Notwithstanding any other provision of this Act, money of a minor deposited pursuant to Section 24-21 of the Probate Act of 1975 shall not be presumed abandoned earlier than 3 years after the minor attains legal age. Such money shall be deposited into an account which shall indicate the date of birth of the minor.”)
  • Illinois RUUPA, 765 ILCS 1026/15-204(a) (Property held in an UTMA account “is presumed abandoned if it is unclaimed by or on behalf of the minor on whose behalf the account was opened 3 years after the later of:

(1) except as in subparagraph (2), the date a communication sent by the holder by first-class United States mail to the custodian of the minor . . . is returned undelivered to the holder by the United States Postal Service;

(2) if a communication is re-sent within 30 days after the date the first communication is returned undelivered, the date the second communication was returned undelivered; or

(3) the date on which the custodian is required to transfer the property to the minor or the minor’s estate . . . .”)