By: Randy Cole
With recent changes to unclaimed property laws in West Virginia, now is a good time for a refresher on the escheatment laws currently in place to ensure your bank is in compliance. Notable changes to laws over the last few years include reduced dormancy periods for certain property types and guidelines on dormancy periods for virtual currency.
Unclaimed property is any asset that has remained unclaimed for a specific period of time, such as unredeemed stock, a check that was never cashed, or contents of a safe deposit box. This typically happens when an owner cannot be located after a period of time known as the dormancy period. The state then becomes the custodian of the unclaimed property.
Banks must report and remit unclaimed property to the West Virginia State Treasurer’s Office, where it is held until the rightful owner, or their heirs come forward to claim it. Under the West Virginia Uniform Unclaimed Property Act, unclaimed property must be reported to the West Virginia State Treasurer’s Office by November 1st of each year.
Specific guidelines for the abandonment of various types of property that banks may typically hold are as follows:
- Traveler’s checks are abandoned fifteen years after issuance. Money order are abandoned seven years after issuance.
- Stock or other equity interest in a business association or financial organization is abandoned five years after the earlier of (1) The date of the most recent dividend, stock split, or other distribution unclaimed by the apparent owner; or (2) the date of the second mailing of a statement of account or other notification or communication that was returned as undeliverable or after the holder discontinued mailings, notifications, or communications to the apparent owner.
- A demand, savings, or time deposit, including a deposit that is automatically renewable, is abandoned five years after the maturity of the deposit. A deposit that is automatically renewable is deemed matured on its initial date of maturity unless the owner consented in a record on file with the holder to renew at or about the time of the renewal.
- Property in an individual retirement account, defined benefit plan, or other account or plan that is qualified for tax deferral under the income tax laws of the United States is abandoned three years after the earliest date of the distribution or attempted distribution of the property, the date of the required distribution as stated in the plan or trust agreement governing the plan, or the date, if determinable by the holder, specified in the income tax laws by which distribution of the property must begin in order to avoid a tax penalty.
- Tangible personal property held in a safe deposit box or other safekeeping depository in West Virginia in the ordinary course of the holder’s business and proceeds resulting from the sale of the property permitted by other law are presumed abandoned if the property remains unclaimed by the owner for more than five years after expiration of the lease or rental period on the box or other depository.
- Virtual currency held or owing by any bank or other entity engaged in virtual currency business activity is abandoned three years after the owner’s last indication of interest in the property.
- All other property types are abandoned three years after the owner’s right to demand the property or after the obligation to pay or distribute the property arises, whichever first occurs. When an interest is presumed abandoned, any other property right accrued or accruing to the owner as a result of the interest is also presumed abandoned.
While banks typically think of abandoned property in terms of customer accounts, the bank’s employees could have abandoned wages. Wages or other compensation for personal services are abandoned one year after the compensation becomes payable.
Property is unclaimed if the apparent owner has not communicated in writing, or by other means reflected in the holder’s records, with the holder concerning the property and has not otherwise indicated an interest in the property. An indication of an owner’s interest in property includes the presentation of a check or other instrument of payment for a dividend, owner-directed activity in the account, deposits to or withdrawals from an account, or the payment of a premium with respect to a property interest in an insurance policy. For demand, savings, and time deposits, any indication of an owner’s interest in any deposit account with a bank is an indication of interest in all deposit accounts held by that bank.
For the most up-to-date and accurate information about the escheatment laws in West Virginia, it is recommended to consult the official website of the West Virginia State Treasurer’s Office or refer to the latest version of the West Virginia Code.
Suttle & Stalnaker, PLLC is ready to help you. If you would like more information on how this applies to you, contact Kelly Shafer, CPA at firstname.lastname@example.org or 304.343.4126. You may also contact Randy Cole at email@example.com or 304.485.6584.