Unclaimed Property Pre-Presumption and Electronic Outreach

Ray Boone
June 1, 2021

There are many things to keep track of with unclaimed property so it’s understandable that certain items, such as unclaimed property pre-presumption outreach and electronic due diligence requirements, can be overlooked. However, they are part of unclaimed property law and therefore require compliance. Sovos tracks all nuances of unclaimed property law and ensures that our customers are aware of their legally required obligations.

Pre-presumption outreach requirement 

Pre-presumption outreach[1] is currently required of all holders with respect to certain property types in Colorado, Illinois, Kentucky, Maine, Pennsylvania, Tennessee and Utah. This outreach performance is required prior to the mandated due diligence process and is a separate requirement. The requirement is embedded within the dormancy provisions. 

All retirement, custodial and securities account holders in Colorado, Illinois, Kentucky, Maine, Tennessee and Utah require pre-presumption outreach. In Pennsylvania all fiduciary accounts, which include any account held by a financial agency or institution, or its agent, for the benefit of another (retirement accounts, custodial accounts, education savings accounts, health savings accounts, securities and trust accounts where the holder is the fiduciary) require pre-presumption outreach.

Multiple states also require pre-presumption outreach via electronic mail. In Colorado, Kentucky, Pennsylvania and Tennessee if an owner’s account is coded exclusively for electronic mail such that the owner does not receive any communications from the holder by first class mail, the holder must attempt to confirm the owner’s interest in the property by sending the owner an email no later than two years after the owner’s last indication of interest.

Illinois, Maine and Utah require electronic pre-presumption outreach via electronic mail if the owner does not receive communications from the holder by first class mail on at least an annual basis. The email must be sent no later than two years after the owner’s last indication of interest (three years in Illinois for securities). In Illinois, Maine and Utah holders who send communications to the owner via first class mail, regardless of whether an account is coded for electronic outreach, are exempt from this electronic pre-presumption outreach requirement.

Electronic due diligence requirements 

Electronic due diligence is now required in addition to first class mail for all property types in Illinois, Kentucky, Maine, Nevada, Tennessee and Utah for those owners who have consented to receive electronic communications from the holder (unless the holder believes the email address is invalid). Thus, holders must send the due diligence notice via first class mail AND electronically. In Colorado and Pennsylvania if an owner has consented to receive electronic communications from the holder, the holder may choose to send the due diligence notice via first class mail OR email (unless the holder has evidence that the email address is not valid). In multiple states holders must promptly attempt to contact the owner by first class mail if the holder receives notification that the email was not received or the owner does not respond within 30 days after the email has been sent.

In this digital age, many businesses and customers prefer to communicate via email. However, electronic due diligence has its challenges as many corporate and privacy policies limit what information can be sent via email and processes need to be implemented to track and record undeliverable and/or bounced emails. 

Pre-presumption outreach rules are subject to change

It is important to note that regulations surrounding pre-presumption and email outreach are subject to change as new legislation is constantly enacted. Because of compliance and email restriction reasons, we cannot offer electronic outreach on behalf of our customers. However, Sovos keeps track of all applicable regulatory changes and analyzes client files to identify the pre-presumption and electronic outreach populations.

Take Action

Our team of consultants and subject matter experts assist companies across a wide variety of industries maintain unclaimed property compliance, streamline their process, implement policies, and reduce exposure. Get in touch with an expert today.

[1] Before a property becomes classified as abandoned or eligible for unclaimed property due diligence mailing some states require a pre-presumption outreach. Like due-diligence mailings, pre-presumption outreach’s goal is to reconnect owners with their property.

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Ray Boone

As Vice President of Compliance Services, Ray oversees the Compliance Services department for the Tax and Regulatory Reporting (TRR) product line which includes unclaimed property, tax information reporting (1099, AEOI, ACA), IPT reporting, and insurance statutory reporting.
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