Webinars Q&A

The following are questions that the Treasurer’s Office received from holders during the Fall 2007 Unclaimed Property Webinars:

Due Diligence

Bad Address

Q If we receive an envelope back with an unable to forward address label what should we do if we don't have another address? Is this considered due diligence?

A Keep a record of the unable to forward address and yes, this is considered due diligence, as you do not have a sufficient address.

Owner is deceased

Q If we know that the owner of uncashed checks is deceased, should we still perform due diligence?

A You would still want to mail out due diligence as you may catch an heir to the property by doing so. Unless you are certain that the mail is not being forwarded, you would want to still perform due diligence.

Statements

Q We send statements out to customers, the statements do not get returned, but customers don't do any transactions with this account. It has been over three years that this account has been inactive. Does this need to be sent into the TOS?

A No – as long as address correction is requested on the face of the envelope (556.2e)

Certified or First Class Letters?

Q Does the letter a holder sends out need to be sent Certified Return Receipt or just First Class?

A First Class – unless the holder is a bank or financial institution and the unclaimed property is as described in 556.2 (accounts). If those two apply, then please refer to Iowa Code Chapter 556.2.

Property

Q Does the 3 year time limit pertain to uncashed payroll checks under $25? Is it state law you must wait three years to submit unclaimed property?

A The amount of time that a property must be dormant before it gets turned over to the state depends on the type of property that is to be reported. In the case of the payroll check, Iowa's dormancy period is one year. On average, most properties reported to Iowa are to be abandoned for three years before they can be reported to the state. You will want to refer to our Property Types page in our reporting manual for the specifics.

Money Orders and Cashier's Checks – Instruments where the owner is not definite

Q Who do we list as the owner? Do we have to perform due diligence on these items?

A The owner is listed as unknown or you can enter what you have as the remitter and payee – we do have owner type codes for both. As far as due diligence goes, according to Iowa code 556.11.5:

"If the holder of property presumed abandoned under this chapter knows the whereabouts of the owner and if the owner's claim has not been barred by the statute of limitations, the holder shall, before filing the annual report, communicate with the owner and take necessary steps to prevent abandonment from being presumed. The holder shall exercise due diligence to ascertain the whereabouts of the owner."

It is your job as a holder to determine based on the information that you have to what lengths you should go to follow this section of the law. If you feel that you will be able to ascertain who is owed this outstanding obligation without having to send it to the state, then by all means, perform due diligence. If you do not have enough information to make that determination, then due diligence cannot be preformed. The key is trying to find the rightful owner and that is the reason that we require holders to send out due diligence.

Specific Holder Type Questions

Banks

See statements and certified letters under due diligence for other bank related issues

Dormant account with active account – same owner

Q We have accounts that have been dormant for over three years but the owner has other active accounts. Could the dormant account be considered abandoned?

A No. Because the owner of the account has another active relationship with you, the dormant account cannot be considered abandoned property (556.2d)

IRA’s

Q How do we handle an abandoned IRA?

A An IRA cannot be reported until three years after its mandatory distribution maturity date, which is when the owner reaches 70 ½. If you have more questions, you can reference Iowa's Code – 556.7.

Co-Operations

Q How do Co-Operations fit in when reporting unclaimed property?

A Co-ops are exempted from turning over unclaimed dividends, patronage dividends, membership fees or capital credit distributions AS LONG AS the unclaimed funds are put into a fund to be used for the teaching and promoting of Co-Ops. There are more detailed instructions as to how to handle the unclaimed funds in IA Code Sections: 490.629 and 499.30A. Co-Ops still must turn over all other properties that are unclaimed (i.e. – unclaimed wages, utility deposits, overpayments…). It is in their best interest to file a negative report every year that they do not have funds to report.

Counties

Q Is county government required to report?

A No. County government’s code (IA Code 331) supercedes the Iowa State Treasurer’s code and therefore they do not have to file unclaimed property with the state.

Q If county government is not required to report, is city government required to report?

A Yes.