Do You Have Unclaimed Property?
What does "escheat" mean? If you are like me, you have never heard of the word, let alone know what it means. The Merriam-Webster dictionary defines escheat as "the reversion of lands in English feudal law to the lord of the fee when there are no heirs capable of inheriting under the original grant." Ok great, but what does this mean to me, a business owner today? Today. escheat applies to turning over unclaimed property - abandoned property, such as unclaimed security deposits and outstanding accounts receivable credits - to your state government.
Most business owners never realize that they may have unclaimed assets. For instance, do you have an uncashed payroll check for a former employee. If the check remains outstanding, you may have escheat issues. You may be required to file a form with your state treasurer reporting the amount of the unclaimed property. You might also have a responsibility for attempting to contact your former employee and if the check remains outstanding for a time period set by state law, you may have to turn the funds over to your state government or face penalties for failing to do so. After learning this, I bet that this midevil word "escheat", just took on more importance and is a word you need to know.
What About Me?
Escheat also can apply to you in a positive way. You may be owed unclaimed property. Escheat applies to banks, insurance companies, utilities, and other businesses, too. You or your company could have a claim to recover property that's rightfully yours. For example, you moved your business to a new location and neglected to apply for a refund of your utility deposit. Escheat rules apply.
How Do I Find Out If I have Unclaimed Property?
Finding out if you have a claim is easy and free. Most states have databases whereby you can search for unclaimed property. Be sure to check each state databases where your business is currently operating or has operated in the past. For Illinois, check out https://icash.illinois.gov to see if you have unclaimed property you forgot.
Every Likes to Spend Less
Escheat may help your business in another way too. Your state government, at some point in time depending on your state laws, will dipose of the unclaimed property via public auctions. You may be able to pick up some valuable assets for cheap. Assets such as vehicles, office equipment and industrial machinery can be found in these state auctions. In Illinois, you can find information on these public auctions at https://ibid.illinois.gov
If you want more information or need assistance, give Dugan & Lopatka, CPAs a call at (630) 665-4440.