Holder Frequently Asked Questions

1	What is an Escheat?
2	What is unclaimed property?
3	How long is a dormancy period?
4	Who is a holder?
5	When does property become “Unclaimed”?
6	When are Holders required to report Unclaimed Property?
7	Is there a minimum amount that does not have to be reported?
8	Are holders obligated to report and remit unclaimed property to other states?
9	Is there a specific way to report unclaimed property?
10	Is a holder required to do anything to locate the owner prior to remitting the funds?
11	What happens if a holder does NOT report unclaimed property?
12	Can a holder reimburse a customer or reactivate a customer’s account?
13	What attempts are made by the State to find the rightful owner?
14	What does the State do with the money before it is claimed?
15	What is the purpose of this law and the Escheat Program?

1. What is an Escheat?
Simply put, an escheat is the succession of abandoned property to the State. It is commonly associated with properties that comes from an estate of a person dying without a will and without any known heirs. However, this concept has been broadened to include the recovery of any property that results from the failure of a person legally entitled to that property to make a valid claim against the holder of the property within a prescribed period of time. Consequently, the terms escheat and unclaimed property are used interchangeably.[top]

2. What is unclaimed property?
Unclaimed property consists of bank accounts, wages, refunds, utility deposits, insurance policy proceeds, stocks, bonds, contents of safe deposit boxes, etc. that have been abandoned – that is, for which there have been no documented transactions or contact with the owners for a statutory period of time known as a dormancy period. There are over 100 types of property which may become unclaimed. The term property is defined in North Carolina General Statute 116B-52(11). There is a detailed listing on the back of the ASD-159 reporting form.[top]

3. How long is a dormancy period?
In most cases, the dormancy period varies from 1 to 5 years depending on the property type. Utility deposits and refunds have a 1-year dormancy period. Wages have a 2-year dormancy period. Accounts payable items have a 5-year dormancy period. The dormancy holding periods are discussed in North Carolina General Statute 116B-53(c). They are also listed on the back of the ASD-159 reporting form.[top]

4. Who is a holder?
North Carolina General Statute 116B-52 (5) states “Holder means a person obligated to hold for the account of or deliver or pay to owner property that is subject to this Chapter.” In essence, any business association in possession of property is a potential holder. This includes but is not limited to banks, insurance companies, utilities, corporations, government agencies, nonprofit organizations.[top]

5. When does property become “Unclaimed”?
In accordance with North Carolina General Statute 116B-53, property becomes unclaimed when the owner has not communicated in writing or by other means reflected an interest in the property or the account in which the property is held. An indication of interest may include the cashing of a check, owner directed increase or decrease of the property, owner activity in another account, the payment of a premium or amount owed. [top]

6. When are Holders required to report Unclaimed Property?
As stated in North Carolina General Statute 116B-60(d), the report must be filed before November 1 of each year and cover the 12 months preceding July 1 of that year for all Holders except Life Insurance. Life Insurance companies must file before May 1 of each year for the calendar year proceeding.[top]

7. Is there a minimum amount that does not have to be reported?
No. North Carolina General Statute 116B does not exclude small dollar amounts. Businesses must report all unclaimed property, regardless of the amount. Items under $50 may be reported and remitted in a lump amount listed as Aggregate. Although not required, we request that a detail listing of names and address be provided for aggregate amounts. This will assist us in refunding amounts in the aggregate.[top]

8. Are holders obligated to report and remit unclaimed property to other states?
Yes. The Supreme Court ruling in Texas vs. New Jersey dictates that unclaimed property must be reported and remitted to the state of the owner’s last known address. If that state does not have an applicable law regarding the property, the property must be sent to the holder’s state of incorporation. If the owner’s last known address is unknown, that property would also be reported to the holder’s state of incorporation.[top]

9. Is there a specific way to report unclaimed property?
Yes. An ASD-21 (Report of Unclaimed Property) and an ASD-159 (Report of Unclaimed Property Verification and Checklist) must be used to report abandoned property. Please note that the ASD-159 must be notarized. In addition, Holders with listings of over fifty (50) owners are requested to submit their report via diskette in the specified NAUPA standard electronic file format. The NAUPA format and electronic reports may be obtained at www.wagers.net/hrs/index.htm. A hard copy of your report must be included with your electronic filing for internal control purposes. Tangible property must be submitted on form ASD-127 and securities on an ASD-215. These forms may be downloaded from our website. A check for the total amount escheated must accompany the proper forms.[top]

10. Is a holder required to do anything to locate the owner prior to remitting the funds?
YES! A holder must perform due diligence. North Carolina General Statute 116B-59 requires that: (1) a holder make a good faith effort to locate the owner and (2) a holder shall send a written notice (NCGS 116B-59(c) defines what should be included in the notice. A sample notice is also available under the Guides to Unclaimed Property on our website.), by first-class mail, to the apparent owner, not more than 120 days or less than 60 days before filing the report to the last known address of the apparent owner as reflected in the holder’s records, if the value of the property is $50.00 or more. Holders not performing this requirement may be subject to penalties per NCGS 116B-77. [top]

11. What happens if a holder does NOT report unclaimed property?
A holder who fails to report, pay or deliver property within the time prescribed by law, or fails to perform duties required by this law, such as due diligence, will be subject to all penalties under G.S. 116B-77. This could include a daily interest penalty, a $1,000 civil penalty each day the report is withheld, plus 25% of the value of any property that should have been reported. Also a holder who fails to report may be a likely audit candidate.[top]

12. Can a holder reimburse a customer or reactivate a customer’s account?
Yes. A holder may reimburse a customer or reactivate an account even though the money has already been sent to the State Treasurer. If a holder chooses to reinstate an account, the holder may file a substantiated claim using a Holder Refund Request form (click link) with the Unclaimed Property Division and be reimbursed for the funds.[top]

13. What attempts are made by the State to find the rightful owner?
As required by statute, a listing of owners of unclaimed property is sent annually to the clerk of superior court of each county and to at least two newspapers having general circulation in North Carolina. In addition, other attempts are made by the State Treasurer that are not required by statute. Such means include an internet search on our website, our presence at local events such as fairs and festivals, and additional media coverage such as television and radio, state legislators, Equifax searches, etc.[top]

14. What does the State do with the money before it is claimed?
The North Carolina State Education Assistance Authority (SEAA) is an agency of the State of North Carolina and is authorized by the General Assembly to administer post-secondary education programs of student financial assistance created under Federal or State law. North Carolina General Statute 116B-37 provides that the interest earnings from the Escheat Fund, minus administrative expenses, be deposited with the SEAA. The law further provides that this money will be utilized to provide grants and low interest loans to worthy and needy North Carolina students in State-supported schools of higher education. In July 2004, $36,356,125 was deposited with the SEAA for this purpose. This will provide over 10,000 additional grants and low-interest loans to North Carolina students in State-supported schools of higher education. [top]

15. What is the purpose of this law and the Escheat Program?
In 1970, legislation mandated that the North Carolina Department of State Treasurer assume responsibility for the administration of the escheat program that was previously administered by the University of North Carolina. The purpose of the program is to:

Recover unclaimed or forgotten property

Reunite these properties with the rightful owner

Remit the interest earnings on the funds invested to the North Carolina State Educational Assistance Authority to provide loans to worthy and needy North Carolina students in State-supported institutions of higher education. [top]