Unclaimed property is any financial asset that has been left with a “holder,” such as a bank, insurance company or other business or organization and has gone unclaimed beyond the dormancy period. Examples of unclaimed property include uncashed payroll checks, inactive stocks, dividends, checking and savings accounts as well as many other property types.
This past year has continued to provide updates to Michigan's Unclaimed Property laws. These two legislative changes provide holders significant benefits:
- New unclaimed property auditing standards have been adopted, which place limits on the use of extrapolation in audits.
- Michigan has adopted an appeals process to provide holders avenues of relief prior to the filing of litigation.
There has also been a marked increase in unclaimed property litigation nationwide, which is working to shed light on practices long held by the holder community to be deceptive, unfair, and not supported by the unclaimed property laws.
The recent cases filed by Temple-Inland and Osram Sylvania are worth taking a peek at, as they expose the third-party contingency fee audits for what they truly are – a money grab. In Temple-Inland, the federal court judge noted "I found it astounding, that without records, a liability in the hundreds of thousands could be estimated."
Contributed by Lynn A. Gandhi, partner at Honigman Miller Schwartz and Cohn LLP.
View the on-demand webinar “Unclaimed Property Reporting Update” with Lynn Gandhi and Khalilah Spencer.