Top 5 Things to Consider Heading into Fall UP Filings

This blog was last updated on July 20, 2023

It’s that time of year when we all begin focusing on fall unclaimed property (UP) filings. For anyone who has experience with UP filings, you have all had to cope with change during a filing season. The catalyst to change can appear in many forms, such as statutory changes to dormancy or filing dates, a state launching a new website for report delivery, changes to a state administrator handbook or changes within your organization that impact internal timelines. Subscribe to state unclaimed property news alerts as states often communicate regulatory and administrative changes via email alerts. With that in mind, we would like to try to help everyone anticipate potential changes during the unclaimed property filing cycle.

Statutory changes

This is perhaps one of the most impactful changes but also the one that generally provides the most lead time. A state changing filing due dates is certainly disruptive to a reporting cycle. Most recently, several states changed insurance filing deadlines from October to April. In addition, virtual currencies are a prime example of a property type with rapidly changing unclaimed property requirements. You can expect to see frequent changes in this space as many states enact statutory or regulatory changes in the form of dormancy and/or delivery requirements (liquidation vs. digital wallets). Many current unclaimed property laws were written before virtual currency existed.

Handbook changes

States often make changes to handbooks several months in advance of a filing deadline. One can generally anticipate several last-minute changes. Review handbooks for changes no later than 45 days prior to a deadline because there have been updates to handbooks within 60 days of a filing deadline. Another area of focus: what happens when a filing date falls on a weekend or holiday? There are several states that address this scenario on their state website, in their handbook or unclaimed property laws. If you are unsure, reach out directly to a state to clarify when to file.

Report delivery

Like monitoring handbook changes, it is also important to ensure that you are familiar with report delivery instructions. There are several states that require account setup prior to submitting a file. As you can imagine, states become more inundated with requests as the filing deadline approaches. Obtain credentials and verify access to a state’s website more than 30 days prior to a deadline.

Payment delivery

In addition to filing the report before the deadline, delivery of cash or securities to the state is equally important. For a report to be considered an on-time filing, both the report and payment must be delivered on time. Many states require electronic payment at the time of filing. Payment instructions must be communicated internally to your finance team to ensure you are prepared to remit cash properties on time. With respect to securities, it is important to verify delivery instructions (broker account, pre-submission, worthless securities, etc.). Often, you can find these details on a state’s website or in the state’s handbook.

California

Last year, California eliminated the requirement for sending a CD-ROM as part of the report delivery and began using electronic report delivery via its website. California is the only state that requires holders to submit two NAUPA files, so we want to specifically call out a few common reporting pitfalls.

• Remittance properties. Because June remittance has just been completed, you should be diligent in updating your records to reflect properties remitted in June to California. By doing so, you will avoid reporting these properties a second time in the October notice filing.
• Banking account, brokerage or securities accounts. When you deliver properties on the notice report filed in October, it is important to ensure you do not close these properties at the time of notice. Be prepared for owners to initiate contact because of California’s due diligence mailing.
• Retirement accounts. If you are filing retirement accounts in California, tax withholdings should be reflected at the time of remittance filing rather than at the time of notice.

Change cannot be predicted and is often out of our control. Instead, we need to focus on the events that we can control, as that is our ability to prepare for change. We can prepare for events that have changed in the past, then focus on those items.