24 JULY / AUGUST 2021 FEATURE Changes to Unclaimed Property Policies and Procedures Necessitated by adoption of the RUPA Financial institutions should immediately review their policies and procedures regarding the identification, reporting and disposition of unclaimed property for any changes necessitated by Indiana’s new law regarding unclaimed property. On April 29, Gov. Eric Holcomb signed SEA 188, repealing the current Indiana Unclaimed Property Act and adopting the Revised Unclaimed Property Act. The RUPA, which is based substantially on the Uniform Law Commission’s Revised Uniform Unclaimed Property Act, updates Indiana’s unclaimed property laws and became effective on July 1, 2021. Because the RUPA replaces the Unclaimed Property Act in its entirety, financial institutions should immediately review their policies and procedures regarding unclaimed property for any necessary changes. Among the more notable changes, the RUPA: 1. Revises the definition of “property”; 2. Changes when certain types of property are presumed abandoned; and 3. Modifies the manner in which financial institutions may communicate with the owners and apparent owners of property which they hold. Changes to the definition of property. It is crucial that financial institutions have a clear understanding of what constitutes property under the RUPA. The definition of “property” in the RUPA differs materially from its definition in the Unclaimed Property Act. The RUPA’s definition includes all of the tangible and intangible items included in the Unclaimed Property Act and expressly adds virtual currency, payroll cards, unclaimed tickets for which the issuer has a duty to provide a refund, and any amounts due and payable under an annuity contract. The RUPA excludes from the definition of property worthless securities (securities for which the value is less than the liquidation and delivery costs), securities subject to certain liens, legal holds or restrictions, property held in an ABLE account (also referred to as a 529A account), game-related digital content, financial organization loyalty programs, and loyalty cards. Changes to when property is presumed abandoned. The time frames for determining when property is presumed abandoned under the RUPA are similar to those in the Unclaimed Property Act. It is important to note, however, that the RUPA changes when those time frames commence for certain types of property. For example, property held in a tax-deferred pension or retirement account was presumed abandoned under the Unclaimed Property Act if the owner had not communicated with the financial institution within three years after the “earliest” to occur of certain enumerated events. In contrast, under the RUPA, property held in a tax-deferred pension or retirement account is presumed abandoned if the owner has not communicated with the financial institution within three years after the “latest” to occur of certain different enumerated events. How financial institutions may communicate with owners and apparent owners of property. Both the Unclaimed Property Act and the RUPA require financial institutions to attempt to communicate with the owners or apparent owners of property prior to Larry Tomlin Partner SmithAmundsen LLC ltomlin@salawus.com SmithAmundsen LLC is a Diamond Associate Member of the Indiana Bankers Association.
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