You May Be Entitled To Unclaimed Property!
Abandoned and unclaimed property is subject to the laws of “escheat” which is pronounced “es-cheet.” According to a family tale, several generations ago, my Drake ancestors filed a claim in England to recapture the Sir Francis Drake fortune. Although my ancestors were able to prove that they were descendants of Sir Francis’ brother, the English court ruled that the Drake fortune had “escheated” to the “Sovereign;” thus, my ancestors were barred from reclaiming what was rightfully theirs. Regretfully, I can’t help but to think that every time there is a royal event, I am paying for the pageantry.
In short, “escheat” refers to the power of the state to claim abandoned or unclaimed property. In North Carolina, holders of abandoned or unclaimed property are obligated to report and deliver abandoned or unclaimed property to the State in order to be in compliance with State laws and regulations.
There are certain periods referred to as “dormancy periods” after which, the holder of the property is required to report the property as abandoned or unclaimed. Property is considered abandoned or unclaimed if there has been no documented contact with its owner(s) for the “dormancy period.”
The escheat laws also apply to estates where either the deceased person died without a will leaving no heirs or the deceased person’s will failed to completely dispose of property where there are no living heirs. The failure to have a final beneficiary will result in unclaimed property being escheated to the state.
An example of the application of the escheat laws which is easily overlooked is the failure of social membership organizations to escheat unclaimed refundable membership deposits. Thus, when a former member and owner of a refundable membership deposit fails to claim the deposit, the property is subject to being escheated to the state. The entity holding the property has an obligation to report and deliver the unclaimed property to the North Carolina State Treasurer.
There are penalties associated with the failure to report, pay or deliver abandoned property to the state – $1000 per each day the report, payment or delivery is withheld or not performed up to a maximum of $25,000, plus 25% of the value of the property that should have been reported.
The laws applicable to abandoned and unclaimed property are much more complicated than set out in this article. In addition, there are procedures through which the rightful owners of escheated property can reclaim their property from the state. In fact, the State of North Carolina makes an effort to assist the public in reclaiming abandoned and unclaimed property. The last estimate on the North Carolina State Treasurer’s Website was that the State held $771 million in unclaimed property.
If you have an interest in researching this subject in more detail, then see Chapter 116B of the North Carolina General Statutes and the “North Carolina Unclaimed Property Act.” You can also check if you are entitled to any abandoned or unclaimed property by visiting the North Carolina State Treasurer’s website: www.nctreasurer.com/claim-your-cash.
F. Lee Weaver, Esq. is an estate planning and corporate law attorney at Weaver | Budd, Attorneys at Law. To schedule a consultation with him, please call (704) 841-0760. The information contained in this article is general in nature and not to be taken as legal advice, nor to establish an attorney-client relationship between the reader and F. Lee Weaver or Weaver | Budd, Attorneys at Law.
Submit your questions for The Fine Print to: firstname.lastname@example.org