New Illinois Laws for 2017, Part 2: Unclaimed and Abandoned Property
This is the second in a series of posts about new Illinois probate and estate laws taking effect in late 2016 or the beginning of 2017.
One of the primary tasks of an executor or successor trustee is to ascertain and marshal the decedent’s assets. As an attorney who regularly advises and assists executors and trustees, one of the items that is always on my checklist is “unclaimed property.”
What is unclaimed property? It’s property that has been turned over to the State after it has been abandoned and not claimed by the true owner. This could be a utility refund check after a change of address or a dividend check after a change in marital status or property not claimed by family after death. Once turned over, it is held by the State (theoretically forever) until properly claimed by the owner or the owner’s legal representative.
Fortunately, in today’s digital age, searching for unclaimed property that has been turned over to the State is relatively easy. Illinois’ program — iCash (formerly called “Cash Dash”) — is run by the Treasurer’s Office. The webpage to search for Illinois unclaimed property is here: https://icash.illinoistreasurer.gov/app/claim-search#results-form
The steps for claiming your own property is easy. Claiming on behalf of a recently deceased individual requires some additional documentation (probate letters of office or a small estate affidavit), but is also fairly straightforward. Where things can get a bit stickier is when the owner is long-since deceased. Why is this tricky? In many cases, the beneficiaries are also deceased, and thus their interest must be claimed by their representative(s). Generally speaking, the longer the property remains unclaimed, the more challenging it becomes to eventually claim.
What does this have to do with new laws? Unclaimed and abandoned property has gotten the attention of legislators in a number of areas. There are three new laws for 2017 that relate to unclaimed and abandoned property:
1. Unclaimed Life Insurance Benefits Act. Public Act 099-0893 (eff. 01/01/2017) imposes new requirements on life insurance companies to discover, locate and notify beneficiaries of life insurance and annuity contracts. Insurance companies are required to complete a comparison using the Social Security Administration’s Death Master File by 12/31/2017 and thereafter on a semi-annual basis. For potential matches, the law sets forth the good-faith efforts that the company must perform to locate and notify beneficiaries and to pay out the proceeds.
The upshot: Life insurance companies who have long pocketed billions in unclaimed proceeds will soon have to reform their ways.
2. United States Savings Bonds. Public Act 099-0556 (eff. 01/01/2017) amends Illinois’ Uniform Disposition of Property Act to provide that U.S. savings bonds in possession of the State Treasurer that are 5+ years past the final maturity date are presumed abandoned. The law provides a process for the Illinois Treasurer to commence proceedings in Sangamon County for a determination that the property will escheat to the State.
The upshot: Let your family know about those old savings bonds!
3. Presumption of Abandonment for Property Held by Governments Reduced From 7 to 5 Years. Under Public Act 099-0577 (eff. 01/01/2017), unclaimed property held by any federal, state or local government will be presumed abandoned after 5 years rather than after 7 years.
The upshot: Governments need your money.
And the attention of Illinois legislators on this area may not be over. On February 8, 2017, the Illinois House introduced the Revised Uniform Unclaimed Property Act (House Bill 2603). The bill is a 244-page complete rewrite of the rules relating to unclaimed and abandoned property modeled after the Uniform Law Commission’s uniform law completed in 2016.
Unclaimed property laws may also be on the radar of the United States Supreme Court. Just last year, justices raised due process concerns over “decidedly old-fashioned methods” of notice.
Consider yourself on notice and check to see if Illinois has money for you or your family HERE.