Unclaimed property is defined as tangible and intangible property that has been unclaimed for a statutorily defined amount of time. It can take many forms, like dormant bank accounts, uncashed payroll or vendor cheques, stocks, bonds or other securities, safe deposit box contents, etc.
Most companies know what unclaimed property is because they need to account for it in their financial statements. They need to track and process vendor cheques that were never cashed or customer deposits that were never reclaimed. However, many businesses are unaware of having their own unclaimed property in the form of lost financial assets.
Businesses and agencies often find themselves in possession of money that belongs to another company, government or person who has never received or claimed the funds. Whether it relates to a bank draft or corporate dividend cheque that was not cashed, or the owner of a brokerage account has moved or is deceased, or an insurance claim refund due or life policy was not received, or someone forgot about transferring a bank account after a merger or acquisition; all of these circumstances can result in unclaimed, or lost, financial assets.
For example, one typical scenario is: Your grandmother owned a brokerage account for many years that accrued to a reasonable sum, and she neglected to inform family members about it prior to her death. It has been 10 years since she passed away and the executors, heirs or other family members were unaware of the existence of this account. The brokerage company where the brokerage account exists is considered the holder and your grandmother is the owner.
According to most unclaimed property laws the holder of the brokerage account asset is required to conduct due diligence to reach out to find the legal owner of the unclaimed brokerage account. If the rightful owner does not claim the asset within a defined dormancy period, the holder is obligated by law to report and remit the brokerage account to the required government agency as defined in the unclaimed property legislation for that jurisdiction.
Under a variety of unclaimed property laws in various North American and English Commonwealth jurisdictions, the common denominator is that any holders of these unclaimed or dormant financial assets must file annual reports which include the last known address information of the rightful owners of the balances, and remit the funds to the appropriate government agency. However, for jurisdictions where there are no such laws, these funds remain with the businesses or agencies that held the assets when they became dormant and simply accumulate.
Corporations, individuals and some government agencies are owed money derived from over 60 different types of unclaimed financial assets that are being held in trust by foreign governments for the rightful owners. Some lost or forgotten original sources of consumer, corporate or government unclaimed property are:
• Corporate or individual savings & chequing accounts
• Bank drafts, deposits, uncashed cheques and certified cheques
• Certificates of deposit, bonds, mutual funds
• Traveller’s cheques, gift cards, gift certificates, etc.
• Health or property insurance policy proceeds
• Pension accounts and other retirement assets
• Matured corporate and government bonds
• Bankruptcy claim settlements
• Tax refunds
• Employee payments and uncashed payroll
• Brokerage accounts and unpaid corporate dividends
• Dividend and interest payments due but not deposited
• Unexchanged shares and underlying stock
• Refunds and rebates
• Customer credits and unapplied payments
• Dormant trade accounts, commissions and fees
• Health and benefit payments
• Accounts receivable and accounts payable
• Oil & Mineral proceeds
• Travellerveal pques, gift cards, gift certificates, etc.
• General ledger items
• Tangible property
• Unidentified cash/credits
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