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Delaware Makes Changes to Unclaimed Property Laws

Delaware recently enacted legislation that makes various changes to its law regarding unclaimed property.  These changes include amendments to its voluntary disclosure program and imposing interest on late-filed unclaimed property.

Regarding its voluntary disclosure program,  effective July 1, 2015,  the State Escheator cannot initiate any new examinations records or an investigation of any person, business, association, or organization unless they have been provided written notification by the Secretary of State that the person, business, association, or organization may enter into an unclaimed property voluntary disclosure agreement.  In addition, the Secretary of State can request that any person, business organization or association enter into an unclaimed property voluntary disclosure agreement.  If the form showing intent of the person, business organization, or association to enter into a voluntary disclosure agreement is received by the Secretary of State within 60 days after the request, the person, business organization, or association will be referred to the State Escheator for examination.

Any person, business organization or association that has indicated in writing its intent to enter into a voluntary disclosure agreement must complete a review of books and records and file reports of the abandoned property related to the following transaction years, of which the due dates of (2) and (3) may be amended at the discretion of the Secretary of State:

  1. Beginning January 1, 1996, with respect to any holder whose intent to enter into an unclaimed property voluntary disclosure agreement was accepted by the Secretary of State after September 30, 2014, and who enters an unclaimed property voluntary disclosure agreement and makes payment in full or enters into a payment plan no later than June 30, 2016.
  2. Beginning January 1, 1996, any holder whose intent to enter into a voluntary disclosure agreement was accepted by the Secretary of State after September 30, 2014 and on or before December 31, 2016, and who enters an unclaimed property voluntary disclosure agreement and makes a full payment or enters into a payment plan within two years from the date of the holders intent was accepted by the Secretary of State.
  3. Beginning January 1, of nineteen years prior to the year in which the holder’s intent is accepted by the Secretary of State, with respect to any holder whose intent was accepted by the Secretary of State on or after January 1, 2017.  The holder shall enter into the voluntary disclosure agreement and make a full payment of the liability or enter into a payment plan within two years from the date of the holder’s intent to enter was accepted by the Secretary of State.

The July 1, 2016 sunset of the voluntary disclosure program is eliminated with this legislation and any late-filed unclaimed property that is reported and remitted on or after March 1, 2015 will be subject to interest at a rate of 0.5% per month on the outstanding amounts.  This will run from the date the amounts or property were due until paid, up to 25%. 

In addition, effective July 1, 2017,  the State Escheator cannot initiate any new examination of records or an investigation of any amounts owed that relate to transactions that are more than 22 years prior to the report year in which the State Escheator has provided written notice of such examination.  In addition, the State Escheator may not seek payments of any amounts arising from such examination that relates to transactions that are more than 22 years prior to the calendar year in which the State Escheator provides written notice. 

For more information, click here.

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