Peacock Tales • Winter 2016
In July of 2014, the escheat rules in Pennsylvania were changed. Many of you might be asking yourself, “What the heck are escheat rules?” Well, when property is unclaimed or abandoned, after a certain period of time, the property is “escheated,” or transferred, to the state. As of July 2014, the period of time before property may be transferred to the state was reduced from five years to three years for most kinds of property. To better understand what this means, here is an example.
You have a checking account at a local bank. It is the only account you have with that particular bank. The account has a significant balance, but you haven’t withdrawn any money from the account or deposited any money into the account for a period of three years. At that point, the bank has the right to consider the property unclaimed and abandoned and the bank can transfer that money to the state.
Why you might ask, didn’t the bank notify me that they were going to do this? Well, according to the law, the bank doesn’t have to. There is no requirement in the law that notices have to be sent to the owners of the property letting them know that it will be transferred to the state. That being said, the Pennsylvania Treasury Department recommends that notices be sent to owners of soon to be transferred property.
The three year clock starts running at different times, depending on the kind of property in question. For example, the time period starts running for checking and savings accounts from the last withdrawal or deposit. In those cases, the clock is reset multiple times a year, depending on how often you make a deposit to, or withdrawal from, the account. But what about other types of property? The time period for some property doesn’t start until the property owner passes away, while the time period for other types of property starts on the date the property reaches maturity. Let’s look at another example.
You purchase a five year CD from a bank. The time period for the CD to be transferred to the state does not start until the CD reaches maturity. Once the CD matures, the three year clock begins to run and if nothing is done with it, it could be transferred to the state.
So what can you do to make sure that your property doesn’t get transferred to the state? As already mentioned, the time period restarts on checking and savings accounts every time a deposit or withdrawal is made, but what about other property? There are several ways you can notify the holders of your property that you still have an interest in the property. You can contact the holder of the property by written communication, you can make verbal contact with the holder of the property (we recommend you document the conversation), or you can make electronic contact through a secure or password protected site.
If you’re worried that your property may have been escheated to the state or that it could potentially escheat sometime soon and you don’t know what you should do, we urge you to contact Peacock Keller for assistance.
Peacock Keller, LLP • 70 East Beau Street • Washington PA 15301 • 724-222-4520