An obligation held, issued or owed in the course of business (known as the “Holder”) that is due and owing to individuals or other companies (known as “Owners”). The property becomes abandoned or unclaimed property once there has been inactivity or no contact between the Holder and the Owner. This period of inactivity is known as the dormancy period. Once dormant, the property should be remitted to the appropriate state.
All 50 states and the District of Columbia have enacted laws that require Holders to report and remit abandoned or unclaimed property to the state. Delaware’s Abandoned or Unclaimed Property Law is codified in Chapter 11 of Title 12 of the Delaware Code (the “Abandoned or Unclaimed Property Law”). Each state’s laws are different.
Abandoned or unclaimed property is that which is subject to being reported and remitted to Delaware pursuant to the Abandoned or Unclaimed Property Law is defined in 12 Del. C. § 1130(18), such as the following:
Outstanding or voided accounts payable or vendor disbursements
Outstanding or voided payroll disbursements
Accounts receivable credit balances
Unclaimed customer deposits
Unidentified cash/miscellaneous income general ledger accounts
Suspense and/or UP general ledger liabilities
Outstanding or voided self-insurance claim payments
Outstanding or voided flexible spending account claim payments
After the dormancy period has been satisfied, the Holder is obligated to report and remit the abandoned or unclaimed property to the state of last known address of the apparent Owner. If the address is foreign or unknown, the property is remitted to the state of incorporation of the Holder, see Texas v. New Jersey, 379 U.S. 674 (1965).
The State of Delaware (“State”) takes custody of the property and is required to publish a list of property being held by the State in an attempt to reunite the property with its rightful Owner.
Pursuant to 12 Del. C. §1153(c), if unclaimed property is remitted to the State in good faith, the State will defend the Holder against any claims to such property and indemnify the Holder against any liability on the claim—this applies with respect to claims by Owners or by other states.
Legal Disclaimer: The materials contained herein are intended to provide information in regard to the subject matter covered. The Delaware Department of State is not engaged in rendering legal, accounting, or other professional services. If legal advice or other professional assistance is required, the services of a qualified professional should be sought.