Do You Know What to do With Unclaimed Property?

Indiana’s unclaimed property laws have been around since the mid-1960’s. The Unclaimed Property Department (UPD) is a division of the Attorney General’s office in Indiana. The unclaimed property laws were set in place to protect the interests and rights of lost property owners and prevent expense and liability associated with the property holders. The most common sources of unclaimed property funds are from insurance claims, securities, wages/payroll, outstanding checks, and bank accounts.

The unclaimed property law requires:

  • Businesses to review their records each year to determine whether they hold any funds, securities, or other property that has been unclaimed.
  • These businesses, or holders, make annual reports and transfer the property to the appropriate states.
  • The business whether incorporated in Indiana or not, to report property for Indiana. The only requirement is that the business records show that the property owner’s last known address is in Indiana.
  • Each state to maintain unclaimed funds and related owner information for claim by the rightful owner. All states must make a diligent effort to locate and return these funds to the rightful owner, at no cost to the owner.

Since wages/payroll and outstanding checks are the most frequently identified unclaimed property in our client base, GCPAs recommends the following steps from the IndianaUnclaimed.gov website. The company or organization should follow the laws for unclaimed checks which says for all amounts greater than $50:

  1. mail notifications to property owners by 1st Class mail (or better) to last known address,
  2. this must be done 60-120 days prior to filing an unclaimed property report with the state of Indiana,
  3. after efforts to notify are deemed unsuccessful, remit to the state, and
  4. maintain supporting documentation for 10 years.

Based on IndianaUnclaimed.gov – a company or an organization should submit an annual report of unclaimed property for paychecks if 1-year dormancy. All other outstanding checks must be dormant for 3-years before reporting to the state. To help avoid dormant checks, GCPAs recommends that companies and organizations review their outstanding check lists at least semi-annually and reissue payments as necessary. Reporting deadlines for the state of Indiana – life insurance reporting is due May 1 and all other funds reporting is due November 1. All reports can be filed online.

If the proper reporting process is not followed and a company or an organization is audited by the state of Indiana; companies and organizations may be required to provide financial statements, employment records, physical evidence that steps were taken to notify the property owner, and all audit and legal expenses as well as penalties, if applicable, will be billed to the company or organization.

Businesses should not report forfeited reservation deposits for hotels, rentals, etc., prepaid calling cards, gift cards, abandoned vehicles, real estate, furniture, stolen property, or business to business credit balances.

If you would like additional information or to discuss the topics mentioned, please contact us at (317) 241-2999.