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Learn the unclaimed property rules and their time limits for the state of California.
In California, all things relating to unclaimed property are handled by the Division of Collections, Bureau of Unclaimed Property Unclaimed Property, of the California State Controller.
California businesses have a number of responsibilities concerning unclaimed property. Initially, written notice must be sent to the apparent owner of the unclaimed property, if known. If the property remains unclaimed, businesses have a number of filing and reporting requirements to fulfill. Most importantly, businesses are required to turn over any and all unclaimed property to the state. Stiff penalties apply to businesses who fail to comply with any of these requirements.
Individuals should know that California property is generally presumed abandoned if it has remained unclaimed by the owner for more than three years after it became payable or distributable. However, this time limit varies depending on the type of property involved. Once abandoned property is turned over to the state by a business, an individual then has five years to reclaim it before the state sells the property to the highest bidder at a public sale.
In California, information reports are required from businesses (e.g., banks and insurance companies) holding abandoned property. The report is made to the State Controller on state issued forms and is due before November 1 for each year ending as of June 30 or earlier. Insurance companies must file by May 1 of each year ending as of December 31 or earlier.
The report requires identification of the property and its former owner and dates when the property became payable and when the last transaction with the owner occurred.
Prior notice to owner. All businesses and financial institutions are required to send a notice to the owner's last known address informing the owner that the account will be transferred to the State Controller if the owner does not notify the institution of the owner's intent to maintain the account.
Delivery. Every person filing a report is required to, no sooner than seven months and no later than seven months and 15 days after the final date for filing the report, pay or deliver to the State Controller all escheated property specified in the report. If a person establishes his or her right to receive any property specified in the report to the satisfaction of the holder before that property has been delivered to the Controller, or it appears that for any other reason the property may not be subject to escheat, the holder is not required to pay or deliver the property to the Controller but is instead required to file a report with the Controller that contains information regarding the property not subject to escheat. Any property not paid or delivered that is later determined by the holder to be subject to escheat is subject to interest, as provided below.
Recordkeeping. A business must generally maintain related records seven years after the unclaimed property is reported.
Penalties. Holders that fail to report and deliver unclaimed property, as required, are subject to annual interest payments of 12 percent, as well as to penalties, unless the failure is due to reasonable cause.
Interest may be waived if reasonable cause exists. Reasonable cause means the exercise of ordinary business care and prudence. Specifically, interest will be waived if (1) in the absence of willful neglect, the failure was due to circumstances beyond the holder's control or (2) the delay or failure to file was due to erroneous information given to the holder of unclaimed property by an employee of the California Controller's office, unless the reliance was not reasonable cause for late reporting, payment or delivery.
The burden is on the property holder to establish reasonable cause. The property holder must submit a sworn affidavit to the Comptroller's office attesting to the circumstances establishing reasonable cause.
In California, property is generally presumed abandoned if it has remained unclaimed by the owner for more than three years after it became payable or distributable. However, this time limit varies depending on the type of property involved. Once abandoned property is turned over to the state by a business, an individual then generally has five years to reclaim.
No sale of escheated property may be made until 18 months after the final date for filing the report. Securities listed on an established stock exchange and other securities may be sold by the Controller no sooner than 18 months, but no later than 20 months, after the final date for filing the report.
Any property delivered to the Controller that has no apparent commercial value must be retained by the Controller for a period of not less than 18 months from the date the property is delivered to the Controller.
Locating abandoned property held by the state. New changes to the California unclaimed property program enacted in 2007 should make it easier for property owners to be reunited with their property. The more expansive notification program will provide:
In order to inform owners about the possible existence of identified unclaimed property, the State Controller is required to mail, within 165 days after the final date for filing the report of escheated funds or property, a notice to each person having an address listed in the report who appears to be entitled to property with a value of $50 or more that has been escheated. If the report includes a Social Security number, the Controller is required to request that the California Franchise Tax Board (FTB) provide a current address for the apparent owner on the basis of that number.
The Controller must mail the notice to the apparent owner for whom a current address is obtained if the address is different from the address previously reported to the Controller. If the FTB does not provide an address or a different address, then the Controller must mail the notice to the address listed in the report. The mailed notice must contain:
The Controller is also required to establish and conduct a notification program designed to inform owners about the possible existence of unclaimed property that has been received. Upon the request of the Controller, a state or local governmental agency may furnish to the Controller from its records the address or other identification or location information that could reasonably be used to locate an owner of unclaimed property. If the address or other information requested is deemed confidential under any California laws or regulations, it shall nevertheless be furnished to the Controller. However, neither the Controller nor any officer, agent, or employee of the Controller shall use or disclose that information except as may be necessary in attempting to locate the owner of the unclaimed property.
In any case, unclaimed property held by the state may still be found by searching the state's website (http://scoweb.sco.ca.gov/UCP/).
To find out if other states may be holding your unclaimed property, search the national database established by the National Association of Unclaimed Property Administrators (NAUPA).
Filing a claim. A claim for recovery of abandoned property is filed with the State Controller on a form designated by that agency. The Controller must investigate the claim and render a decision within 180 days. The agency must notify the claimant by mail of its decision.
Claims denied or not decided by the Controller within 180 days after the claim was filed may be appealed by filing an action naming the State Controller as defendant in the superior court of any county or city in which the California Attorney General has an office. The action must be brought within 90 days of the Controller's decision or within 90 days after the deadline for the Controller's decision.
If you're looking for additional information on unclaimed property, we recommend contacting your state's governmental agency that oversees the administration of this area of the law. For help in answering a specific unclaimed property question in California, contact the following:
CA State Controller
Division of Collections - Bureau of Unclaimed Property
3301 C Street, Suite 712
P.O. Box 942850
Sacramento, Ca 94250-5873
Phone: (916) 323-2827
Fax: (916) 323-2851
|Property Type||Presumed Abandoned After|
|Bank account||three years|
|Checks or drafts||three years|
|Demutualization proceeds||by the date of demutualization
However, the dormancy period increase to two years if notices to the owner are returned undeliverable, and three years if notices are not returned at all.
|Gift certificates, gift cards, and credit memos||no specific provision|
|Insurance policies||Life or annuity policies: three years.|
|IRAs or retirement funds||IRAs, SEPs, and employee benefit plan distributions: three years.|
|Money orders||seven years|
|Other intangible personal property not otherwise specified||three years|
|Proceeds from class action suits||no specific provision|
|Property distributable by a business association in the course of dissolution||six months after the date set for final distribution
Money that a business association has been ordered by the court or administrative agency to refund is presumed abandoned if it remains unclaimed by the owner for more than one year after it became payable in accordance with the final determination or order providing for the refund (regardless of whether the final determination or order requires the owner to make a claim for it).
|Property held by courts or public agencies||three years|
|Property held by fiduciaries||three years|
|Safe deposit boxes||three years|
|Shares in a financial institution||three years|
|Stocks, dividends, and distributions||three years|
|Traveler's checks||15 years|
|Deposits and advances owed utility company customer||no specific provision|
|Wages or salaries||one year|