Policies & Procedures


 

Section: ACT
Part: POL
Statement No.: 5.0
Date: 07/01/08
University of North Carolina - General Administration
Administrative Policies and Procedures Manual
Title: Escheat Funds

 

1.             An escheat is the succession of abandoned property to the State. It is not a tax. It results from the failure of a person legally entitled to the property to make a valid claim against the holder of the property within a prescribed period of time. Property is also escheated from the estate of a person dying intestate or partially intestate without any known or discoverable heirs.

 

2.             The payment of any moneys, or the transfer of any property to the Escheat Fund under the provisions of Chapter 116B by any person, firm, association, corporation or organization, or any local government, state or federal official or agency relieves it of any further liability for the escheat action (G.S. 116B-32). Any moneys escheated since July 1, 1971, which are claimed by the rightful owner will be refunded by the State Treasurer.

 

3.             The primary purpose of the Escheat program is to provide a means by which abandoned property can be brought under the control of the State and converted to the benefit of the people of North Carolina.  The State Treasurer invests the escheated moneys in the same manner that the State retirement funds are invested. The income derived from this investment is distributed annually to the State Education Assistance Authority to be used to make loans to worthy and needy North Carolina resident students who are enrolled in State public institutions offering post-secondary education (G. S. 116-36).

 

4.             Real or personal property which escheats under North Carolina law is liquidated and is placed in the Escheat Fund along with all other moneys collected or earned. The escheated principal is held in trust for the rightful owners who may receive same upon the presentation of properly documented claims [G.S. 116B-38(a)].

 

5.             Property belonging to residents of the State, both tangible and intangible, which is unclaimed or abandoned is to be escheated and placed under the control of the State.

 

6.             The period of time which the holder must retain the property in dormant custody varies with the classification of the property; however, the dormant custodial period for uncashed checks is one year.. Beginning November 1, 2001, holders will be reporting property deemed escheatable as of June 30, 2001 using the “new” dormancy holding period stated above. The period of dormancy begins when property (1) is not claimed at the time it becomes due and payable, or (2) when owner initiated activity in an account ceases, or (3) when no personal interest is evident on the part of the owner.  Please see the Report Conversion Table - exhibit EXH 5.0 1of 1.

 

7.             Attempts must be made on or before August 15, to notify each owner at the last known address that his property, worth $50.00 or more, became escheatable on the previous June 30 and will escheat to the State of North Carolina unless claimed.

 

8.             The Escheat Report (ASD-21), that is used for reporting eligible unclaimed and abandoned property to the State of North Carolina, must be filed with the Escheat Office of the Department of State Treasurer on or before  November 1. The report, along with total remittance, should give an accounting of all escheated property due as of the previous June 30. Negative reports should be signed at the bottom of the form and submitted.

 

9.             An application for a refund may be filed with the State Treasurer's Office at any time after funds or property has escheated. The claim should be made by the rightful owner, his legal representative, or for him by the person or institution who escheated the funds. Proper identification and documentation to support the claim will be required in each case.

 

10.          The claim shall be made on a form prescribed by the State Treasurer. If the State Treasurer determines that the claimant is entitled to all or a portion of the escheated property or the proceeds from its sale, he shall make payment of the claim [G.S. 116B-38(a)].