The Uniform Unclaimed Property Act (1995).

• Author: Stimmel, Todd R.

Proposed revisions to abandoned property laws are expected to result in increasing the $2 billion in property now remitted annually to the states.

The Uniform Unclaimed Property Act, a model law that embodies the rules and procedures requiring companies to report abandoned property, also known as the escheat laws, was revised in the summer of 1995 and will be published in early 1996. The new act is entitled the Uniform Unclaimed Property Act (1995) and is the result of a two-year effort by the Conference of Commissioners on Uniform State Laws, an organization made up of representatives from each of the states whose function it is to propose model laws for use by the states. The conference worked together with the National Association of Unclaimed Property Administrators (NAUPA), a trade association of state officials, and other interested industry groups to revise the 1981 Uniform Act, which is the basis for more than half of the states' abandoned property statutes, to propose revisions for consideration by the conference. The 1995 Uniform Act will not become law in any state until adopted in part or in whole by the state legislature. Indiana was the first state to adopt the new 1995 Uniform Act, effective in 1996. The purpose of this article is explain the proposed changes in the uniform law.

The abandoned property statutes apply not only to private business enterprise but also to state and local government agencies that write checks, maintain account balances, or hold funds in escrow. Virtually every company and government entity has abandoned property and is required to file reports with the states annually. Industry experts estimate that the $2 billion in abandoned property remitted annually to the states is a small percentage of the actual property considered abandoned and reportable to the states. [ILLUSTRATION FOR EXHIBIT 1 OMITTED] Indeed, states already have progressively shortened the dormancy period required to presume that property is abandoned, based on the general acceptance of the notion that it is much easier to locate missing owners after a shorter period subsequent to their becoming "lost." Given the shrinking resources available to state governments and a widespread antitax climate, it is likely that nontax revenue-generating programs like abandoned property will be not only fully embraced by the states but expanded and strengthened.

History and Concepts

The concepts underlying abandoned property law can be traced back to British common law, when abandoned land was returned to the king as a matter of right. The permanent transfer of property rights to the king was called escheat. In the United States, where the concept has been adapted to apply to...