Unclaimed property laws in Vermont were established to protect the financial assets of individuals and businesses. The Vermont Unclaimed Property Division, part of the State Treasurer’s Office, is responsible for reuniting rightful owners with their lost or abandoned assets. The division holds over 900,000 properties valued at more than $119 million. These laws safeguard unclaimed property until rightful owners or their heirs claim it.
This blog post aims to provide a comprehensive overview of the Vermont unclaimed property holder reporting process, including recent updates to statutes, reporting requirements, and essential forms needed to remain in compliance with the state.
Key Elements of Vermont’s Unclaimed Property Law
Revised Uniform Unclaimed Property Act
Vermont adopted the Revised Uniform Unclaimed Property Act in 2019, which became effective on January 1, 2021. This act modernized the state’s unclaimed property laws, providing clearer guidelines and procedures for holders and the state.
Statistical Sampling
How is Statistical Sampling Used?
The Vermont statutes allow the use of statistical sampling as a method for estimating the value of unclaimed property. This approach helps ensure accurate reporting and compliance with state laws. The state uses statistical sampling in unclaimed property reporting under the following circumstances:
- Incomplete Records: When holders do not have complete records for the entire period under review, statistical sampling helps estimate the unclaimed property liability based on available data.
- Large Volume of Data: For holders with a large volume of records, reviewing each record individually can be impractical. Statistical sampling allows for a more efficient and manageable review process.
- Audit Efficiency: During audits, states may use statistical sampling to expedite the process and ensure compliance without the need for exhaustive examination of all records.
- Voluntary Disclosure Agreements: When holders enter into voluntary disclosure agreements with the state, statistical sampling can be used to estimate unclaimed property liabilities for periods where records are missing or incomplete.
What are the Steps in Statistical Sampling?
And it typically involves the following steps:
- Selection of Sample: The state selects a representative sample of records from the holder’s data. This sample should accurately reflect the characteristics of the entire population of unclaimed property.
- Analysis: The state analyzes the sample to identify unclaimed property. This involves reviewing the records to determine which items meet the criteria for unclaimed property.
- Extrapolation: Based on the findings from the sample, the state extrapolates the results to estimate the total amount of unclaimed property within the entire population. This helps in determining the overall liability.
- Reporting and Compliance: The state uses the extrapolated data to ensure holders comply with unclaimed property laws. This may involve issuing notices or requiring holders to report and remit the estimated unclaimed property.
This process helps streamline the identification and reporting of unclaimed property, making it more efficient for both the state and the holders.
Recent Updates to Statutes
Vermont updated the statutes governing unclaimed property in the 2024 session of the General Assembly. These updates reflect changes in rules and regulations, ensuring compliance with the latest legislative requirements. It’s crucial for holders to stay informed about these updates to avoid penalties and ensure proper reporting.
Vermont Unclaimed Property Types, Dormancy Periods, and Due Diligence Letters
Dormancy periods in Vermont vary by property type:
- Uncashed Checks: 3 years
- Bank Accounts: 3 years
- Uncashed Checks: 3 years
- Safe Deposit Box Contents: 5 years
- Stocks and Dividends: 3 years
- Insurance Payments: 3 years
- Utility Deposits: 1 year
- Customer Overpayments: 3 years
- Gift Certificates: 3 years
Before reporting unclaimed property, holders must send due diligence letters to the owners of the property. These letters must be sent at least 60 days prior to reporting and no more than 120 days before the report is due. These letters notify owners of their abandoned property and provide them with thThe purpose of these letters is to notify owners of their abandoned property and provide them with an opportunity to claim it before it is reported to the state.
Reporting Information
Steps to Reporting
- Preparation: Gather all necessary information and documents, including the Annual Compliance Report Cover Sheet/Verification Checklist.
- Due Diligence: Send due diligence letters to property owners at least 60 days before reporting.
- Documentation: Include the notarized Annual Compliance Report Cover Sheet/Verification Checklist.
- Submission: Submit the report by May 1. Reports postmarked by May 1 are acceptable.
What Happens If You Don’t Report
The penalties for willful failure to report unclaimed property in Vermont are steep. Holders can be assessed a 25% interest penalty and a civil penalty of $1,000 for each day the report is withheld, up to a maximum of $25,000. Additionally, the state may require holders to cover the expenses of an audit if they are found to have willfully neglected to file.
Reimbursement Requests
Reimbursement requests allow holders to reclaim funds that were reported as abandoned but later paid to the owner. This makes certain holders are compensated for any funds mistakenly reported as unclaimed.
Holders seeking reimbursement for property reported as abandoned but eventually paid to the owner can obtain a return of those funds by completing and submitting the NAUPA Holder Reimbursement Request form. This process ensures that holders are compensated for any funds that were mistakenly reported as unclaimed.