Your Rights and Responsibilities in Unclaimed Property

Email business scams, like the one in my last post, aren’t that surprising, but another business client was most definitely surprised at home one recent evening by a person on his doorstep claiming to have information about valuable property belonging to his business that was being held by the State of Colorado. For a fee, this individual would help my client recover those assets.

This was not technically a scam, I explained to my client, but he most certainly didn’t need to pay anyone (even me) to get his property back. Colorado, like every other state, has a law requiring a person holding unclaimed property to deliver it to the state. These laws are the modern replacement of the concept of escheat developed during England’s feudal period. Now instead of the feudal lord reaping the benefits of unclaimed property, state governments do; at least until the rightful owner claims the property.

Fortunately, the Colorado State Treasurer, who administers our unclaimed property law, makes it easy for property owners to claim their lost property. All my client needed to do, and all you need to do, if you haven’t already, is check the Great Colorado Payback site and follow the instructions there. If you are on the list, you’re in good company. The state reports over 500,000 individuals and businesses have abandoned property in state custody.

You might be wondering, what kind of property? Mostly money, like uncashed checks, unclaimed refunds and bank account balances, but the law applies to every kind of property, from stock certificates to the contents of a forgotten safety deposit box, that has been abandoned by an owner whom the holder can’t otherwise locate.

Of course, this cuts both ways for human-owned businesses. You might be the beneficiary of forgotten property that you can reclaim, but your business also has an obligation to report annually to the state any abandoned property in its possession. This property could belong to former customers, employees, or vendors, or anyone else you can’t find to return the property to them. Property is generally deemed abandoned five years after your last contact with that person, however, for uncashed paychecks the period is only one year.

Remember the definition of property is very broad. Those unclaimed customer credits, or other forgotten sums or items, are not your bonanza; after five years, they go to the state. Colorado law does cut human-owned businesses some slack. If the annual gross receipts of the business are under $500,000, reporting is not required until the aggregated amount of unclaimed property exceeds $3,500 or any single item is $250.00 or more. If you don’t understand the Great Colorado Payback website or have questions about the rights and responsibilities of your business under this law, by all means see your lawyer.