Topic: Unclaimed Property
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We have a customer who opened a safe deposit box in 2002 and stopped paying the rent in 2012, after which we had no more contact. The lease on the box expired in 2013. However, we have exercised a right of setoff in the customer’s deposit account to pay some of the past-due rental fees. Can we drill the box and remit the contents as unclaimed property?
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Yes, we believe that your bank may (and should) report and remit the safe deposit box property to the Treasurer’s office under the Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA). Generally, the Illinois RUUPA provides that safe deposit box property is considered unclaimed five years after the expiration of the lease or rental period…
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We have guardianship accounts held as certificates of deposit (CDs) that were established under court orders prohibiting any withdrawals until the beneficiary reaches the age of majority. We have no other accounts for or contact with the guardians and minor beneficiaries for these accounts. Under the new Illinois unclaimed property law, do we have to report and remit these CDs to the state if there is no contact within three years, even if the minor has not yet reached the age of majority?
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No, the three-year abandonment period will not begin to run until the account beneficiaries reach the age of majority — assuming that the accounts were established as minor guardianship accounts under the Illinois Probate Act of 1975, or as custodial accounts under the Uniform Transfers to Minors Act (UTMA). The new Illinois Revised Uniform Unclaimed…
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We viewed a webinar on the new Illinois unclaimed property law. The speaker stated that IRAs can be treated as active accounts after the owner turns 70½, when the IRAs are in distribution. Is that true? The law seems unclear.
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Yes, we believe that individual retirement accounts (IRAs) should be treated as active accounts after the owner reaches the age of 70½, provided your bank has evidence that the IRA owner is receiving IRA distributions or otherwise has “indicated an interest” in the IRA. The Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA) requires inactive…
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If we don’t have an email servicing vendor, do we have to send out notices by email under the new Illinois unclaimed property law? Our account agreements include a statement that customers who sign the agreement are consenting to us sending account notices by email, but not all of our customers have completed full ESIGN consent procedures. What is the penalty for a failure to send a second copy of our due diligence notices by email?
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Yes, your bank is required to send due diligence notices by email, based on both the Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA) and the email consent provision in your account agreements. The Illinois RUUPA requires property holders to send their due diligence notices by regular mail and also by email if the apparent…
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The Illinois Treasurer’s website states that our unclaimed property report “should reflect account activity for the one-year period three years prior to June 30 of the report year. Example: If your report is due Nov. 1, 2018, your report will cover activity from July 1, 2014, through June 30, 2015.” Shouldn’t we be submitting data for three years under the new law?
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We agree that the Treasurer’s website contains confusing wording. The Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA) requires each annual report to “cover the 12 months preceding July 1 of that year.” Additionally, the report made in 2018 must incorporate a one-time lookback covering “all items of property that would have been presumed abandoned…
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We are trying to understand the following ownership scenario under the new Illinois unclaimed property law. Say we have one account jointly owned by three owners — A, B, and C — as well as a second account owned by A and B and a third account by C alone. All three share the same mailing address. Can an indication of interest in the first account keep BOTH other accounts from being considered unclaimed property? Do we have to determine who initiated the activity to make this determination?
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We do not recommend treating activities on the first account (owned by A, B, and C) as indications of interest in the other accounts without determining who initiated the activity. The new Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA) provides that an inactive deposit account is considered active if “any other accounts, including loan…
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If a custodian for an UTMA account also has an individual checking account at our bank, and both accounts share the same mailing address, can the custodian’s activities on the individual checking account be treated as indications of interest in the UTMA account?
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Yes, we believe that the custodian’s activities on the individual checking account could be treated as indications of interest in a Uniform Transfers to Minors Act (UTMA) account. The Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA) provides that an inactive deposit account is considered active if “any other accounts” at the same financial institution…
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If we have a customer whose last known domicile is in a state other than Illinois, should we report unclaimed to that state or to Illinois? Does the new Illinois law require us to look at the law of the owner’s last known domicile to determine the abandonment period, or can we continue to use the time periods set forth in Illinois statute and just transfer custody to the appropriate state once the property is considered abandoned under Illinois law?
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As a practical matter, we believe that your bank may report abandoned property to Illinois, even if the apparent owner’s last-known address is in another state. Technically, your bank should be reporting and remitting property to an outside state if your bank’s records show a last-known address outside of Illinois. The Illinois Revised Uniform Unclaimed…
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Under the new Illinois unclaimed property law, would auto debits for utility payments or payroll direct deposits be considered “previously authorized recurring ACH transfers,” meaning that they do not count as indications of interest?
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Yes, we believe that automatically recurring ACH credits and debits are excluded from consideration as indications of interest. The Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA) provides that deposits and withdrawals are activities that count as indications of interest, but it excludes previously authorized recurring ACH debits and credits. This exclusion would cover previously…
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Under the new Illinois unclaimed property law, if a certificate of deposit (CD) customer also has an active safe deposit box, would the activity on the safe deposit box count as activity for the CD?
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Yes, we believe that activity on a safe deposit box would constitute activity on the CD sharing the same “apparent owner” and mailing address at your bank. The Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA) provides that activity “in any other account” at your institution counts as activity on an account to which Section…