Yes, we recommend at least widening your search to also include inherited IRAs for which the mandatory distribution date has begun.

The Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA) requires tax-deferred retirement accounts, including IRAs, to be reported and remitted as unclaimed property on the later of:

1. Three years after the date that a communication is returned undelivered (RPO) or, if re-sent within thirty days, the second RPO, or
    
2. Three years after the apparent owner reaches the age of 70½ years, or one year after the date of mandatory distribution following the apparent owner’s death, whichever is earlier.

Based on these rules, most IRAs will not become unclaimed property until the owner reaches the age of 70½. However, if the original IRA owner has died, the inherited IRA’s owner may be well under the age of 70½, but the required beginning date for distributions could be based on the original owner’s age in some situations. Consequently, we recommend checking for inherited IRAs for which the required minimum distributions have begun, in addition to any IRAs for which the owner has reached the age of 70½.

Note that there are several actions that count as indications of interest in an IRA account, rendering it “active,” most commonly when the IRA’s apparent owner is receiving distributions from the account. Other actions that are indications of interest include when the customer has made a written communication with your bank regarding the account, when an oral communication has been made with respect to the account (provided your bank “contemporaneously makes and preserves a record” of the oral communication), or when there is activity by the customer on another account at the bank that shares the same address as the one for the IRA account. If your bank can show that an IRA’s apparent owner has indicated an interest in the account, the IRA should be treated as an active account.

However, the Illinois RUUPA does not treat automatically recurring ACH transfers as indications of interest. Consequently, if IRA distributions are made through recurring ACH transfers, your bank will need to demonstrate that there has been some other indication of interest in the IRA, as discussed above.

For resources related to our guidance, please see:

• IRS, Publication 590-B, What if You Inherit an IRA? (“If the owner died before his or her required beginning date (defined earlier), and you are the designated beneficiary, you generally must base required minimum distributions for years after the year of the owner’s death using your single life expectancy shown on Table I in Appendix B as determined under Beneficiary an individual, later. . . . Year of first required distribution. If the owner died before the year in which he or she reached age 70½, distributions to the spouse don't need to begin until the year in which the owner would have reached age 70½.”)

• Illinois RUUPA, 765 ILCS 1026/15-202 (“When tax-deferred retirement account presumed abandoned. (a) Subject to Section 15-210, property held in a pension account or retirement account that qualifies for tax deferral under the income-tax laws of the United States is presumed abandoned if it is unclaimed by the apparent owner after the later of:

(1) 3 years after the following dates:

• (A) except as in subparagraph (B), the date a communication sent by the holder by first-class United States mail to the apparent owner is returned to the holder undelivered by the United States Postal Service; or
• (B) if such communication is re-sent within 30 days after the date the first communication is returned undelivered, the date the second communication was returned undelivered by the United States Postal Service; or

(2) the earlier of the following dates:

• (A) 3 years after the date the apparent owner becomes 70.5 years of age, if determinable by the holder; or
• (B) one year after the date of mandatory distribution following death if the Internal Revenue Code requires distribution to avoid a tax penalty and the holder:
  • (i) receives confirmation of the death of the apparent owner in the ordinary course of its business; or
  • (ii) confirms the death of the apparent owner under subsection (b).”)

• Illinois RUUPA, 765 ILCS 1026/15-210(b) (“Under this Act, an indication of an apparent owner’s interest in property includes: . . . (3) presentment of a check or other instrument of payment of a dividend, interest payment, or other distribution, or evidence of receipt of a distribution made by electronic or similar means, with respect to an account, underlying security, or interest in a business association; . . .”)

• Illinois RUUPA Administrative Rules, 74 Ill. Adm. Code 760.300(c) (“Owner-initiated Activity. Owner-initiated financial transactions or authenticated owner-initiated administrative activity are an indication of an apparent owner's interest in the property. A holder must maintain a record of owner-initiated activity. These include, without limitation: . . . 3) non-automated electronic distributions