Unclaimed Property Strategies: More Than Simple Due Diligence

The IOFM Podcast

Unclaimed property expert Jim Sadik talks compliance with IOFM Content Manager Grace Chlosta in this interesting podcast on a topic that impacts most businesses. Organizations usually have at least some uncashed checks or credit balances that need to be managed in accordance with unclaimed property laws, but how they choose to handle them varies. Some companies are strongly motivated to not have to escheat property to the state; others are perfectly happy to escheat the money and let the state handle finding the owner.

Practices vary, notes Sadik. The required due diligence of sending a notification letter may not yield much in the way of results. And simply voiding and reissuing checks to see if the payments will clear on a second attempt creates some potential issues. This tactic requires stringent controls to be certain duplicate payments aren’t made, and can make state unclaimed property auditors suspicious if they detect practices that make it appear as though a company is trying to extend the holding period before escheatment becomes necessary.

Sadik addresses various approaches to resolving unclaimed property issues prior to escheatment, advising that overall, “Any early intervention is better than waiting for a trail to go cold.”