When we discuss state escheat laws in our quarterly newsletter, or when you see news regarding them in the media, it typically centers on companies' obligation to comply or the increasing rate of state unclaimed property audits. However, the The State of Pennsylvania and State Treasurer Rob McCord issued a press release on October 8 on a completely different point. McCord informed PA companies that they may be able to collect unclaimed property that is owed to their business. Specifically, he suggested that "social service agencies, schools, and local governments across the Commonwealth that are strapped for cash can put their money back in their wallets through Pennsylvania's Unclaimed Property Program."
Treasurer McCord's outreach directly relates to Pennsylvania's protracted budget issues. If you're not living in Pennsylvania right now, you're probably happily unaware of the turmoil and debate that surrounded the state budget. While it appears that that the State's budget woes have finally been resolved, it continues to create major issues for companies and organizations dependent on state budget dollars. Large cuts mean that companies and organizations will likely pursue unclaimed assets in the hope of accessing much needed resources.
The Treasurer's unclaimed property cause is well intentioned. State escheat laws and unclaimed property are often seen consumer issues, but the fact is that there are a large amount of corporate and organizational assets that are reported to every state each year which sit unclaimed. It's not just a PA issue.
For those that have taken note of Mr. McCord's press release, I'd like to offer both encouragement and caution if they are looking to collect unclaimed property. There is definitely money to be claimed, but there are risks involved that you should understand before you make a claim.
First and foremost, it's the law to be in compliance with state unclaimed property law. So, for those looking to benefit from the assets held by the state, the right thing to do is to first ensure you are in compliance. It is important to note that not all states have a direct connect between compliance and recovery, but for those states that do, be aware of a potential audit if you are not in compliance.
Treasurer McCord's outreach directly relates to Pennsylvania's protracted budget issues. If you're not living in Pennsylvania right now, you're probably happily unaware of the turmoil and debate that surrounded the state budget. While it appears that that the State's budget woes have finally been resolved, it continues to create major issues for companies and organizations dependent on state budget dollars. Large cuts mean that companies and organizations will likely pursue unclaimed assets in the hope of accessing much needed resources.
The Treasurer's unclaimed property cause is well intentioned. State escheat laws and unclaimed property are often seen consumer issues, but the fact is that there are a large amount of corporate and organizational assets that are reported to every state each year which sit unclaimed. It's not just a PA issue.
For those that have taken note of Mr. McCord's press release, I'd like to offer both encouragement and caution if they are looking to collect unclaimed property. There is definitely money to be claimed, but there are risks involved that you should understand before you make a claim.
First and foremost, it's the law to be in compliance with state unclaimed property law. So, for those looking to benefit from the assets held by the state, the right thing to do is to first ensure you are in compliance. It is important to note that not all states have a direct connect between compliance and recovery, but for those states that do, be aware of a potential audit if you are not in compliance.
If the state finds that the party looking to recover is not in compliance, instead of retrieving much needed assets and capital, a company may find itself facing hefty fines and audit costs. We see this nationwide in the Corporate Asset Recovery area of Keane.
Once you are in compliance it is certainly within reason to request your assets. As more and more businesses have adopted unclaimed property reporting and remittance requirements as part of their normal compliance activities, opportunities are being created for compliant firms to capitalize on cash being held in state unclaimed property offices. Just as your organization reports funds owed to outside corporate entities such as vendors, business partners and affiliates, other firms are reporting your property to the states as unclaimed.
Once you are in compliance it is certainly within reason to request your assets. As more and more businesses have adopted unclaimed property reporting and remittance requirements as part of their normal compliance activities, opportunities are being created for compliant firms to capitalize on cash being held in state unclaimed property offices. Just as your organization reports funds owed to outside corporate entities such as vendors, business partners and affiliates, other firms are reporting your property to the states as unclaimed.
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