Topic: Unclaimed Property
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How should we handle unclaimed property reporting for items that are in a safe deposit box that haven’t been claimed but are owned by an active military individual (according to the Department of Defense’s website)?
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Under the Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA), property held in a safe deposit box is considered unclaimed property five years after the expiration of the lease or rental period for the box. There are no exceptions for active duty military personnel. If a safe deposit box holder has not made any qualifying…
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The Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA) provides that an automatically renewable deposit is not considered abandoned if the “apparent owner consented in a record on file with the holder to renewal at or about the time of the renewal.” What is an acceptable way for an apparent owner to consent to the renewal? Can the consent be written or verbal, in person or by phone call?
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The general rule in the Illinois RUUPA requires an apparent owner’s written “consent” for the automatic renewal of a time deposit, such as a certificate of deposit (CD). However, the Illinois RUUPA also provides several other methods for an apparent owner to “indicate an interest” in an account, including CDs, which include written and verbal…
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We would like to charge an inactivity fee after six months of inactivity. We would cease charging the fee when the account becomes unclaimed property. Are there any state laws on this?
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We are not aware of any Illinois laws stating the timeframes for charging inactivity fees, provided that the fees comply with the requirements in the new Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA). Under the Illinois RUUPA, inactivity fees must be authorized by a valid contract that specifies the time in which your bank…
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We have found dozens of cashier’s checks and money orders that must be reported as unclaimed property. However, we did not send notice to the apparent owners in advance of the November 1 reporting deadline, which is today. How should we proceed?
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Because the Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA) requires your bank’s report to be “complete, accurate, and timely,” we recommend including these items on your report. Failure to meet your bank’s reporting requirements could subject your bank to penalties and fines. However, we do not recommend remitting the money orders and cashier’s checks…
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One of our customers died in 2012. We have continued to withdraw automatic payments for the customer’s lockbox from his demand deposit account. Should we send the contents of the lockbox to the state, in addition to the deposit account funds? Can we use funds from the deposit account to pay to have the lockbox drilled and rekeyed? Our lockbox lease agreement allows us to sell the contents of a box and use any cash contents to offset any lease indebtedness.
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Yes, your bank should report and remit property held in the lockbox to the Illinois Treasurer, as required by the Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA). That law does provide your bank with the right to reimbursement of drilling and rekeying costs, but your bank must apply to the Illinois Treasurer for reimbursement…
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Are there any issues with charging an inactivity fee on checking and savings accounts under the new Illinois unclaimed property law? Can we charge inactivity fees on money orders and cashier’s checks by month?
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We are not aware of any prohibition against charging inactivity fees for checking and savings accounts, provided that the fees comply with the requirements in the new Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA). Under the Illinois RUUPA, inactivity fees must be authorized by a valid contract that specifies the time in which your…
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We have several dormant certificates of deposit (CDs) that are in the middle of a renewal period. We understand that we may report these CDs as unclaimed property without remitting them to the Illinois Treasurer. But once the CDs mature, do we have to send them in on the maturity date, or can we wait until the next November 1?
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Based on the Illinois Treasurer’s recently published proposed administrative rules, your bank may wait until the next reporting date (November 1) following a CD’s maturity before remitting the funds to the state. Under the Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA), automatically renewing CDs that are reportable as unclaimed property do not have to…
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We have been contacting individual retirement account (IRA) owners and beneficiaries in preparation for reporting unclaimed property on November 1. We have narrowed down the list of inactive IRAs to a handful for which the owner or beneficiary has not returned our letters or calls. The owners are under the age of 70½, and we have not had any mail returned undeliverable. Should we report these accounts as unclaimed property?
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No, we do not believe that you should report an IRA as unclaimed property before the owner has died or reached the age of 70½, and mail has been returned as undeliverable. The Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA) requires tax-deferred retirement accounts to be reported and remitted to the Treasurer on the…
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In the new Illinois unclaimed property law, the section regarding tax-deferred retirement accounts references a particular date: “one year after the date of mandatory distribution following death if the Internal Revenue Code requires distribution to avoid a tax penalty to the holder. . . .” What is that date?
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Our understanding is that the “date” referenced in that section is the date on which the deceased owner’s beneficiaries must take their first distribution from the IRA — whether the distribution is a full distribution of the account or the first of many periodic requirement minimum distributions (RMDs). The Illinois Revised Uniform Unclaimed Property Act…
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Under the new unclaimed property law, tax-deferred accounts could be presumed abandoned three years after the date “by which distribution of the property must begin to avoid a tax penalty,” two years after the date “of the required distribution as stated in the plan,” or two years after the date “by which distribution of the property must begin in order to avoid a tax penalty.” How can we calculate those dates for health savings accounts?
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Those dates are inapplicable to health savings accounts (HSAs). HSAs are governed by a section of the Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA) that covers a wide range of tax-deferred accounts, including HSAs. It provides for five separate possible abandonment periods for such accounts, but not all of the possible abandonment periods are…