Escheat - what a funny word

With the annual escheatment season complete, it’s time to prepare for next April’s unclaimed property reporting in Pennsylvania. In Pennsylvania, unclaimed property holders include financial institutions, insurers, utilities, business associations, medical facilities, sole proprietors, fiduciaries, courts, public officers, government entities, and all legal or commercial entities. These entities are required to file a report with the Pennsylvania Treasury if they possess reportable unclaimed property.

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The Pennsylvania Unclaimed Property Act mandates that holders report any property of value that has been lost, forgotten, or inactive for a legally defined period. Key provisions include:

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? Fiduciary Account Reporting: Property in fiduciary accounts is deemed “abandoned” if there’s no owner activity for three years and contact with the owner is lost. Clear guidelines define “interest” (e.g., account access or communication) and outline the process for contacting owners.

? Life Insurance Proceeds: Insurers must cross-check policyholders biannually with the SSA’s Death Master File. If beneficiaries cannot be located, the proceeds are reportable three years after the insurer confirms the policyholder’s death.

? Notice Requirements: Holders must provide notice to property owners 60 to 120 days before reporting abandoned property. This notice should include account and contact details to help prevent incorrect reporting.

? Tax and Custodial Protections: For abandoned retirement accounts transferred to the Commonwealth, the Treasury is assessing potential tax impacts to protect account owners from penalties and maintenance fees.

? Property Held by Utilities: Utilities must designate certain funds as abandoned if unclaimed for specific periods: 1.)Any customer advance, toll, deposit, collateral security, or similar property unclaimed for three years from its due date is presumed abandoned. 2.) Any refund, after deductions, unclaimed for two years after becoming payable is also considered abandoned.

? Property Held by Courts, Public Officers, and Agencies: Most property held by courts, public bodies, or officials that remains unclaimed for more than three years is presumed abandoned.

Local governments are encouraged to establish policies for managing unclaimed property. The Pennsylvania Treasury’s website provides detailed resources and guidance to support these policies and I am betting your particular local government association has policy documents as well.?

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