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Matched Legal Cases: ['§393', '§393', '§393', '§393', '§393', '§393', '§393', '§393', '§393', '§393', '§393', '§393', '§393', '§393', '§393', '§393', '§393', '§393', '§393', '§393', '§393', '§393', '§393', '§393', '§393', '§393', '§393', '§393', '§393', '§393', '§393', '§393', '§393', '§393', '§393', '§393', '§393', '§393', '§393', '§393', '§393', '§393', '§393']

Kentucky Disposition of Unclaimed Property Law - Unclaimed Property Law - Abandoned Property
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Kentucky Disposition of Unclaimed Property Law
Kentucky Law Summary
TITLE XXXIV – DESCENT, WILLS, AND ADMINISTRATION
CHAPTER 393 ESCHEATS
Definitions for chapter — Application of chapter.
(1) As used in this chapter, unless the context requires otherwise:
(a) “Banking organization” means any bank, trust company, savings bank, industrial bank, land bank, safe deposit company, or a private banker engaged in business in this state;
(b) “Business association” means any corporation, joint stock company, business trust, partnership, or any association for business purposes of two (2) or more individuals;
(c) “Financial organization” means any savings and loan association, building and loan association, credit union, cooperative bank, or investment company, engaged in business in this state;
(d) “Life insurance corporation” means any corporation or association transacting within this state the business of insurance on the lives of persons or insurance appertaining thereto, including, but not by way of limitation, endowments and annuities;
(e) “Claim” means to demand payment or surrender of property from the person whose duty it is to pay the claimant, or surrender to him the property involved;
(f) “Treasurer” means the State Treasurer;
(g) “Department” means the Department of the Treasury;
(h) “Person” means any individual, state or national bank, partnership, joint stock company, business, trust, association, corporation, or other form of business enterprise, including a receiver, trustee, or liquidating agent.
(2) This chapter does not apply to money, funds, or any other property held by or owing to any nonprofit, Internal Revenue Code Section 501(c)(3), tax-exempt hospital, or to bonds of counties, cities, school districts, or other tax-levying subdivisions of this state or to any money, funds, or other intangible property at any time held or owing for any minerals or other raw materials capable of being used for fuel in the course of manufacturing, processing, production, or mining. The provisions of this subsection shall be effective retroactively to all such moneys, funds, or other intangible property held or owing by any person on June 1, 1960, or thereafter. Title XXXIV, Chap. 393, §393.010
Use of abandoned property funds to support Commonwealth postsecondary education prepaid tuition trust fund.
Seventy-five percent (75%) of the balance of the abandoned property funds shall be available for support of the Commonwealth postsecondary education prepaid tuition trust fund. Transfers from the abandoned property fund to the trust fund are authorized in order to meet any unfunded liability as determined by the board. Title XXXIV, Chap. 393, §393.015
Property subject to escheat.
If any property having a situs in this state has been devised or bequeathed to any person and is not claimed by that person or by his heirs, distributees, or devisees within seven (7) years after the death of the testator, or if the owner of any property having a situs in this state dies without heirs or distributees entitled to it and without disposing of it by will, it shall vest in the state, subject to all legal and equitable demands. Any property abandoned by the owner, except a perfect title to a corporeal hereditament, shall vest in the state, subject to all legal and equitable demands. Any property that vests in the state under this section shall be liquidated, and the proceeds, less costs, fees, and expenses incidental to all legal proceedings of the liquidation shall be paid to the department. Title XXXIV, Chap. 393, §393.020
Disposition of property subject to escheat.
(1) The personal representative of a person, any part of whose property is not distributed by will, and who died without heirs or distributees entitled to it shall settle their accounts within one (1) year after qualifying, and pay to the department the proceeds of all personal property, first deducting the proper legal liabilities of the estate.
(2) If the whole personal property cannot be settled and the accounts closed within one year, the settlement as far as practicable, shall then be made and the proceeds paid to the department, and the residue shall be settled and paid as soon thereafter as can be properly done.
(3) The personal representative shall take possession of the real property of the decedent not disposed of by his will, and rent it out from year to year until it is otherwise legally disposed of, and pay the net proceeds to the department.
(4) The personal representative shall also make out and transmit to the department a description of the quantity, quality, and estimated value of the real property and its probable annual profits. Title XXXIV, Chap. 393, §393.030
Procedure if legacy or devise is not claimed.
If any devisee or legatee, or his heir, devisee, or distributee, has failed for seven (7) years to claim his legacy or devise, the personal representative of the testator, or other person possessing it shall, after deducting the legal liabilities thereon, pay and deliver it and the net profits from it to the department. Title XXXIV, Chap. 393, §393.040
Presumption of death after seven years — Disposition of property.
When a person owning any property having a situs in this state is not known to be living for seven (7) successive years, and neither he nor his heirs, devisees, or distributees can be located or proved to have been living for seven (7) successive years, he shall be presumed to have died without heirs, devisees, or distributees, and his property shall be liquidated and the proceeds, less costs incident to the liquidation and any legal proceedings, and the liabilities which have been properly claimed and approved against it, shall be paid to the department. Title XXXIV, Chap. 393, §393.050
Presumption of abandonment of certain property held by bank or financial organization.
The following property held or owing by a banking or financial organization is presumed abandoned:
(1) Any deposit (legal, beneficial, equitable, or otherwise), whether payable on demand or a time deposit, including a deposit that is automatically renewable, in any bank or trust company in this state, together with the interest thereon and less any deductions permissible under state or federal law including but not limited to dormancy fees and service charges, unless the owner has within seven (7) years or within seven (7) years of the first date of maturity, in the instance of a time deposit:
(a) Communicated in writing or by other means, reflected in a contemporaneous record prepared by or on behalf of the bank or trust company, with the bank or trust company concerning it;
(b) Been credited with interest on his request or by his action;
(c) Had a transfer, disposition of interest, or other transaction noted of record in the books or records of the bank or trust company;
(d) Increased or decreased the amount of the deposit; or
(e) Has not received a regularly mailed statement of account or other notification or communication, mailed by the bank or trust company. Mailings shall be considered not received if returned to the bank or trust company marked undeliverable by the United States Postal Service or other provider of delivery services. A mailing shall be considered regularly mailed if it is of the type sent to all owners of a certain category of deposit and is mailed no less than annually;
(2) Any sum payable on checks certified in this state or on written instruments issued in this state on which a banking or financial organization or business association is directly liable, including, by way of illustration but not of limitation, certificates of deposit, drafts, money orders, and traveler’s checks, that with the exception of traveler’s checks has been outstanding for more than seven (7) years from the date it was payable, or from the date of its issuance if payable on demand, or, in the case of traveler’s checks that has been outstanding for more than fifteen (15) years from the date of its issuance unless the owner has within seven (7) years or within fifteen (15) years in the case of traveler’s checks corresponded in writing with the banking or financial organization concerning it, or otherwise indicated an interest as evidenced by a memorandum on file with the banking or financial organization;
(3) Any funds or other personal property, tangible or intangible, removed from a safe deposit box or any other safekeeping repository or agency or collateral deposit box in this state on which the lease or rental period has expired due to nonpayment of rental charges or other reason, or any surplus amounts arising from the sale thereof pursuant to law, that have been unclaimed by the owner for more than seven (7) years from the date on which the lease or rental period expired. Title XXXIV, Chap. 393, §393.060
Presumption of abandonment of unclaimed funds held by life insurance corporation.
(1) “Unclaimed funds,” as used in this section, means all moneys held and owing by any life insurance corporation unclaimed and unpaid for more than seven (7) years after the moneys became due and payable as established from the records of the corporation under any contract which has matured or terminated. A life insurance policy not matured by actual proof of the death of the insured is deemed to be matured and the proceeds thereof are deemed to be due and payable if such policy was in force when the insured attained the limiting age under the mortality table on which the reserve is based, unless the person appearing entitled thereto has within the preceding seven (7) years, (a) assigned, readjusted, or paid premiums on the policy, or subjected the policy to loan, or (b) corresponded in writing with the life insurance corporation concerning the policy. Moneys otherwise payable according to the records of the corporation are deemed due and payable although the policy or contract has not been surrendered as required.
(2) Unclaimed funds, as defined in this section, held and owing by a life insurance corporation shall be presumed abandoned if the last known address, according to the records of the corporation, of the person entitled to the funds is within this state. If a person other than the insured or annuitant is entitled to the funds and no address of such person is known to the corporation or if it is not definite and certain from the records of the corporation what person is entitled to the funds, it is presumed that the last known address of the person entitled to the funds is the same as the last known address of the insured or annuitant according to the records of corporation. Title XXXIV, Chap. 393, §393.062
Treatment of refunds of workers’ compensation special fund assessments held by an insurance carrier and owed to an insured employer.
(1) Notwithstanding any provision of the Kentucky Revised Statutes to the contrary, refunds of workers’ compensation special fund assessments levied in accordance with KRS 342.122 shall be deemed “unclaimed refunds” if held by an insurance carrier and owed to an insured employer.
(2) For purposes of this section, “unclaimed refunds” means all unremitted workers’ compensation special fund assessments collected by a carrier, as defined in KRS 342.0011(6), in excess of the applicable special fund assessment rate, owing and unpaid to an insured employer after the Kentucky Workers’ Compensation Funding Commission has made a determination that the carrier has made a reasonable attempt to return the unclaimed refunds to the insured employer.
(3) Unclaimed refunds shall be remitted by the insurance carrier to the Kentucky Workers’ Compensation Funding Commission, created under KRS 342.1223, and shall be credited to the benefit reserve fund, created under KRS 342.1229, within the Kentucky Workers’ Compensation Funding Commission. Unclaimed refunds remitted to the Kentucky Workers’ Compensation Funding Commission and held by that commission for more than two (2) years shall become the property of the benefit reserve fund.
(4) The unclaimed refunds remitted as required in this section to the Kentucky Workers’ Compensation Funding Commission and held for more than two (2) years shall not thereafter be available to any party who may have a claim to the remitted unclaimed refunds, and any claims that arise under this section including claims for the remitted sums shall be forever barred against the Kentucky Workers’ Compensation Funding Commission and any carrier complying with this section.
(5) The provisions of this section shall apply to any refunds or unclaimed refunds owing and held by a carrier on or after July 15, 1998. Title XXXIV, Chap. 393, §393.063
Presumption of abandonment of stock or dividend of business association.
Except as provided in KRS 272.291, any stock or other certificate of ownership, or any dividend, profit, distribution, interest, payment, or principal, or other sum held or owing by a business association for or to a shareholder, certificate holder, member, bondholder, or other security holder, or a participating patron of a cooperative, who has not claimed it, or corresponded in writing with the business association concerning it, within seven (7) years after the date prescribed for payment or delivery, is presumed abandoned if:
(1) It is held or owing by a business association organized under the laws of or created in this state; or
(2) It is held or owing by a business association doing business in this state, but not organized under the laws of or created in this state, and the records of the business association indicate that the last known address of the person entitled thereto is in this state. Title XXXIV, Chap. 393, §393.064
Presumption of abandonment of intangible personal property held by fiduciary.
All intangible personal property and any income or increment thereon, held in a fiduciary capacity for the benefit of another person is presumed abandoned unless the owner has, within seven (7) years after it becomes payable or distributable, increased or decreased the principal, accepted payment of principal or income, corresponded in writing concerning the property, or otherwise indicated an interest as evidenced by a memorandum on file with the fiduciary:
(1) If the property is held by a banking organization or a financial organization, or by a business association organized under the laws of or created in this state; or
(2) If it is held by a business association doing business in this state, or any agent or fiduciary acting for or under contract with a business association doing business in this state, but not organized under the laws of or created in this state, and the records of the business association indicate that the last known address of the person entitled thereto is in this state; or
(3) If it is held in this state by any other person. Title XXXIV, Chap. 393, §393.066
Presumption of abandonment of personal property held by federal government.
(1) All tangible personal property or intangible personal property, including choses in action in amounts certain, and all debts owed or entrusted funds or other property held by the federal government or any federal agency, or any officer, or appointee thereof, shall be presumed abandoned in this state if the last known address of the owner of the property is in this state and the property has remained unclaimed for five (5) years.
(2) The federal government or any federal agency thereof which pays or delivers abandoned property to the department under this section is relieved of all liability to the extent of the value of the property so paid or delivered for any claim which then exists or which thereafter may arise or be made in respect to the property.
(3) The federal government or any federal agency thereof may deduct from the amounts to be paid or delivered to the department the proportionate share of the actual and necessary costs of examining records and reporting such information. Title XXXIV, Chap. 393, §393.068 Repealed, 1998. Title XXXIV, Chap. 393, §393.070
Presumption of abandonment of security deposit or public utility refund.
The following funds held or owing are presumed abandoned:
(1) Any deposit of money, stocks, bonds, or other credits made to secure payment for services rendered or to be rendered, or to guarantee the performance of services or duties, or to protect against damage or harm, and the increments thereof, unless claimed by the person entitled thereto within seven (7) years after the occurrence of the event that would obligate the holder or depository to return it or its equivalent.
(2) Except as provided in KRS 272.291, any sum which a public utility has been ordered to refund and which was received for utility services rendered in this state, together with any interest thereon, less any lawful deductions, that has remained unclaimed by the person appearing on the records of the utility entitled thereto for more than seven (7) years after the date it became payable in accordance with the final determination or order providing for the refund.
(3) If there remains a total of one million dollars ($1,000,000) or more in unclaimed sums one (1) year after a public utility refund became payable in accordance with the final determination or order providing for the refund, excepting sums that may eventually be claimed pursuant to KRS 272.291, and less any lawful deductions, the Finance and Administration Cabinet shall enter into an agreement or agreements with the public utility that will allow the public utility to pay the unclaimed sums, minus the exceptions noted above, to the Kentucky State Treasurer immediately if the Attorney General determines by written opinion that a reasonable relationship exists between the source of and reason for the refund, and the workers’ compensation liability of a bankrupt employer who purportedly was self-insured, either individually or through a self-insurance group, under KRS Chapter 342. Payment of the unclaimed sums to the Kentucky State Treasurer shall constitute a complete release of the public utility from any further responsibility for the sums so paid, and from liability to any person who may have a claim to any of such sums.
(4) The Kentucky Workers’ Compensation Funding Commission shall preserve the rights of persons or ratepayers entitled to claim a refund under this section, and may utilize any funds available to the agency for the purpose of preserving those rights. Title XXXIV, Chap. 393, §393.080
Special expendable trust fund for unclaimed sums under KRS 393.080(3) — administration and distribution of fund — Claims procedures.
(1) Unclaimed sums delivered to the Kentucky State Treasurer pursuant to KRS 393.080(3) shall be placed in a special expendable trust fund established by the Kentucky Workers’ Compensation Funding Commission. The Kentucky Workers’ Compensation Funding Commission shall establish a separate trust account with respect to each final determination or order providing for a refund that the Attorney General determines to have a reasonable relationship to the workers’ compensation liability of a bankrupt employer.
(2) The commissioner of the Department of Workers’ Claims shall be the administrator of the resulting trust fund established pursuant to this section. The commissioner or commissioner’s designee shall be authorized to determine the value of all workers’ compensation claims against the bankrupt employer and to prepare a comprehensive distribution plan. Eligible claimants may elect to participate in a comprehensive distribution plan in exchange for the release of all related claims against the Commonwealth and all of its cabinets, departments, bureaus, agencies, officers, agents, and employees, with the exception of the special fund in the Labor Cabinet.
A claimant shall agree as part of a release under this section not to file any future motions to reopen the named workers’ compensation claim or claims, and not to file new claims with respect to the same injury or occupational disease.
(3) A comprehensive distribution plan for unclaimed utility refunds placed in a trust account pursuant to this section shall consist of the full payment of workers’ compensation income benefits for eligible claimants until the fund is exhausted, subject to the exceptions noted in KRS 393.080 and this section, and may include lump-sum settlements in addition to biweekly payment plans. An initial distribution shall be made to eligible claimants after the commissioner of the Department of Workers’ Claims, or the commissioner’s designee, has made an initial determination of the number of eligible claimants, the amount of income benefits due, and the amount to be retained as a reserve for pending claims. The initial distribution shall include payment of all past due income benefits, without interest, for eligible claimants.
(4) Neither the special fund nor the uninsured employers’ fund shall be considered to be claimants for the purposes of this section. Medical and related benefits shall not be considered in the valuation of the claims unless the amount available in the trust fund clearly exceeds the estimated value of income benefits for all claims. If a workers’ compensation surety bond, letter of credit, or other form of security for the payment of the workers’ compensation liabilities of a bankrupt employer has been collected by the commissioner of the Department of Workers’ Claims or the Workers’ Compensation Board for distribution to claimants in a manner to be determined by court order, it may be assumed in the valuation of the claims in a comprehensive distribution plan that the security will be distributed by the court on a pro rata basis and an appropriate deduction may be taken.
(5) In preparing the valuation of claims for inclusion in a comprehensive distribution plan, the commissioner or commissioner’s designee shall deduct special fund payments. Settlement of a workers’ compensation claim as part of a comprehensive distribution plan under this section shall not accelerate the date on which the special fund’s liability becomes due.
(6) If the bankrupt employer ceased business operations at least three (3) years prior to establishment of a trust account pursuant to this section, only claimants who file workers’ compensation claims within sixty (60) days of the establishment of the trust account or before shall be eligible to receive payments from the trust fund.
(7) All claimants shall cooperate with information requests from the Department of Workers’ Claims concerning prior payments of workers’ compensation benefits. The commissioner of the Department of Workers’ Claims or commissioner’s designee may subpoena witnesses, including present or past managers and officers of the bankrupt employer, and may conduct evidentiary hearings under oath relating to the past and present workers’ compensation liabilities of the bankrupt employer or information relevant to unpaid workers’ compensation benefits. Administrative subpoenas issued under the authority of the commissioner of the Department of Workers’ Claims for this purpose may be enforced in the Franklin Circuit Court.
(8) The Attorney General shall provide representation of the comprehensive distribution plan as a named defendant in the event the establishment of the trust fund is challenged.
(9) The provisions of KRS 393.080(3) or this section shall not be construed to constitute an admission of the validity of any workers’ compensation claims, nor shall these provisions be interpreted in a manner that would transfer or create liability on behalf of the commissioner of the Department of Workers’ Claims, any agency, or employee, beyond that expressly set forth in a comprehensive distribution plan.
(10) The special fund shall issue trust fund checks in the amounts and to the claimants or claimants’ representatives as directed by the commissioner of the Department of Workers’ Claims.
(11) The personnel and other costs of administering a trust fund established pursuant to this section shall be paid out of the investment income of the trust fund.
(12) Attorney fees shall be subject to the limitations and maximum amounts for the payment of attorney’s fees established by KRS 342.320, as well as the approval of the commissioner or the commissioner’s designee.
(13) If a workers’ compensation claimant elects not to participate in a comprehensive distribution plan proposed by the commissioner of the Department of Workers’ Claims or the commissioner’s designee, that claimant shall not be entitled to any portion of the utility refund for the payment of the workers’ compensation benefits. A claimant shall have sixty (60) days following issuance of a comprehensive distribution plan in which to make an election to participate or not. Title XXXIV, Chap. 393, §393.082
Presumption of abandonment of intangible personal property not otherwise covered.
Except as otherwise provided in KRS 393.010, all intangible property, not otherwise covered by this chapter, including any income or increment thereon and deducting any lawful charges, that is held or owing in this state by any person and has remained unclaimed by the owner for more than seven (7) years after it became payable or distributable is presumed abandoned. Title XXXIV, Chap. 393, §393.090
Effect of property owner’s residence in another state.
If specific property which is subject to the provisions of KRS 393.060, 393.064, 393.066, and 393.090 is held for or owed or distributable to an owner whose last known address is in another state by a holder who is subject to the jurisdiction of that state, the specific property is not presumed abandoned in this state and subject to this chapter if:
(2) The laws of such other state make reciprocal provision that similar specific property is not presumed abandoned or escheatable by such other state when held for or owed or distributable to an owner whose last known address is within this state by a holder who is subject to the jurisdiction of this state. Title XXXIV, Chap. 393, §393.092
Unclaimed pari-mutuel tickets from quarter horse or Appaloosa racetracks.
All funds represented by unclaimed pari-mutuel winning tickets held in this state by any person, association or corporation operating a pari-mutuel or similar system of betting at quarter horse or Appaloosa racetracks shall be presumed abandoned, within the meaning of KRS Chapter 393, if not claimed by the person entitled thereto within two (2) years from the time the ticket became payable. Title XXXIV, Chap. 393, §393.095
Property paid into court — When presumed abandoned — Reversion to municipality which procured payment into court.
Any property paid into any court of this state for distribution and the increments thereof, shall be presumed abandoned if not claimed within five (5) years after the date of payment into court or as soon after the five (5) year period, as all claims filed in connection with it, have been disallowed or settled by the court. Provided, however, that any property paid into any court of this state for distribution and the increments thereof, which may be presumed abandoned as provided in this chapter and which shall have been recovered or procured upon the relationship or through the instrumentality of any municipality of this state, shall revert to the general fund of such municipality and at any time after the five (5) year period has expired, after the date of the payment into the court, the municipality may by petition filed against the custodian of such funds, in the court in which said property is located, request the payment thereof to said municipality and the judge of said court shall order the custodian thereof, to pay the entire sum to said municipality. Provided, further that before entering judgment, ordering said sum so paid, the court shall require that notice be published at least once in a newspaper of general bona fide circulation in the county, stating the intention of the court to award such sum to the municipality and final judgment shall not be entered, until fifteen (15) days shall have elapsed from the date of such publication. At any time prior to the final judgment, the court may consider any bona fide claims made by claimants to said property or any part thereof. However, thereafter, any and all claimants shall be forever barred therefrom. Title XXXIV, Chap. 393, §393.100
Holders of abandoned property to report to department — Posting and publication of notices; exceptions — Duty to surrender property to department — Rights of action.
(1) A holder of property presumed abandoned shall make an annual report to the department concerning the property. The report shall be filed on or before November 1 of each year and shall cover the twelve (12) months ending on July 1 of that year. All property so reported shall be turned over by November 1 to the department. The report shall be verified and shall include:
(a) Except with respect to travelers’ checks and money orders, the name, if known, and last known address, if any, of each person appearing from the records of the holder to be the owner of any property of value of one hundred dollars ($100) or more presumed abandoned under this chapter and in the case of unclaimed funds of life insurance corporations, the full name of the insured or annuitant and his last known address according to the records of the life insurance corporation;
(b) The nature and identifying number, if any, or description of the property and the amount appearing from the records to be due, except that items of value under one hundred dollars ($100) each may be reported in the aggregate. The holder of abandoned property shall maintain its records for a period of five (5) years from the date of its report for items reported in the aggregate. If the owner of property reported in the aggregate makes a valid claim within five (5) years, the holder shall refund the property and deduct the amount refunded from the next report due to the department;
(c) The date when the property became payable, demandable, or returnable, and the date of the last known transaction with the owner with respect to the property if readily available; and
(d) Any other information which the department prescribes by administrative regulations necessary for the administration of this chapter. The report shall be made in duplicate; the original shall be retained by the department, and the copy shall be mailed to the sheriff of the county where the property is located or held. It shall be the duty of the sheriff to post for not less than twenty (20) consecutive days this copy on the courthouse door or the courthouse bulletin board, and also to publish the copy pursuant to KRS Chapter 424; except the sheriff shall not be required to publish any item with a fair cash value of one hundred dollars ($100) or less. The list shall be published within thirty (30) days of its receipt by the sheriff and this publication shall constitute compliance with the requirements of KRS Chapter 424. The cost of the publication shall be paid by the state. The sheriff shall immediately certify in writing to the department the dates when the list was posted and published. The list shall be posted and published as required on or before October 1 of the year when it is made, and the posting and publishing shall be constructive notice to all interested parties.
(2) The holder of property presumed abandoned shall send written notice to the apparent owner, not more than one hundred twenty (120) days or less than sixty (60) days before filing the report, stating that the holder is in possession of the property subject to this section; except the holder shall not be required to mail a notice to any apparent owner where the fair cash value of the property is one hundred dollars ($100) or less. The notice shall contain:
(a) A statement that according to a report filed with the department properties are being held to which the addressee appears entitled;
(b) The name and address of the person holding the property and any necessary information regarding changes of name and address of the holder; and
(c) A statement that, if satisfactory proof of claim is not presented by the owner to the holder by the date specified in the published notice, the property will be placed in the custody of the department to whom all further claims must be directed.
(3) Any person who has made a report of any estate or property presumed abandoned, as required by this chapter, shall, by November 1 of each year, turn over to the department all property so reported; but if the person making the report or the owner of the property shall certify to the department that any or all of the statutory conditions necessary to create a presumption of abandonment no longer exist or never did exist, or shall report the existence of any fact or circumstance which has a substantial tendency to rebut the presumption, then, the person reporting or holding the property shall not be required to turn the property over to the department except on order of court. If a person files an action in court claiming any property which has been reported under the provisions of this chapter, the person reporting or holding the property shall be under no duty while the action is pending to turn the property over to the department, but shall have the duty of notifying the department of the pendency of the action.
(4) The person reporting or holding the property or any claimant of it shall always have the right to a judicial determination of his rights under this chapter, and nothing in this chapter shall be construed otherwise. The Commonwealth may institute an action to recover the property presumed abandoned, whether it has been reported or not, and may include in one (1) petition all the property within the jurisdiction of the court in which the action is brought if the property of different persons is set out in separate paragraphs. Title XXXIV, Chap. 393, §393.110
The department shall deduct the proportionate share of the cost, in no event less than one (1) dollar, of the advertisement and the cost of preparing the advertisement required by KRS 393.110 from the amount of any claim allowed. Title XXXIV, Chap. 393, §393.115
Conditions governing enforceability of agreements to locate property presumed abandoned.
(1) An agreement by an owner, the primary purpose of which is to locate, deliver, recover, or assist in the recovery of property that is presumed abandoned, is void and unenforceable if it was entered into during the period commencing on the date that the property was presumed abandoned and extending to a time that is twenty-four (24) months after the date that the property is paid or delivered to the department. This subsection shall not apply to an owner’s agreement with an attorney to file a claim as to identified property or contest the administrator’s denial of a claim.
(2) An agreement by an owner, the primary purpose of which is to locate, deliver, recover, or assist in the recovery of property and that is not in violation of subsection (1) of this section, is enforceable only if:
(a) The agreement is in writing;
(b) The agreement provides that the fee or compensation agreed upon is an amount not more than ten percent (10%) of the value of the property collected;
(c) The agreement clearly sets forth the nature of the property and the services to be rendered;
(d) The agreement is signed by the apparent owner; and
(e) The agreement states the value of the property before and after the fee or other compensation has been deducted.
(3) An agreement covered by this section that provides for compensation that is unconscionable is unenforceable except by the owner. An owner who has agreed to pay compensation that is unconscionable, or the administrator on behalf of the owner, may maintain an action to reduce the compensation to a conscionable amount. The court may award reasonable attorney’s fees to an owner who prevails in the action.
(4) This section does not preclude an owner from asserting that an agreement covered by this section is invalid on grounds other than unconscionable compensation.
(5) An advertisement, a written communication, or an agreement concerning the location, delivery, recover, or assistance in the recovery of property reported under this chapter shall contain a provision stating that, by law, any contract provision requiring the payment of a fee for finding property that has been held by the administrator for less than twenty-four (24) months is void and not enforceable, and that fees are limited to an amount not more than ten percent (10%) of the value of the property collected. Title XXXIV, Chap. 393, §393.117
Sale of property required to be liquidated to pay department.
(1) Tangible personal property required by this chapter to be liquidated in order to permit payment to the department shall be delivered to the master commissioner of the county in which such property is located. The master commissioner shall within a reasonable time advertise the property for sale in accordance with KRS Chapter 424 and shall sell it at public auction to the highest bidder. The master commissioner shall pay to the department the proceeds of such sale, less costs incidental to the liquidation or any legal proceedings, and any liabilities against the property which have been properly claimed and approved.
(2) For intangible personal property required by this chapter to be liquidated so as to permit payment to the department, the department shall require the agencies or holders of abandoned intangible personal property to sell or dispose of the property on a given date at the quoted market value in the case of property listed in recognized market exchanges, or, in the case of property not listed in a recognized market exchange, at a price recommended by the department or at the highest price offered at a public sale, whichever is greater. In the event that the intangible property is of a nature such that there is not a readily available market, the department may offer the property to the highest bidder at public sale at Frankfort, or in whatever city in the state affords, in its judgment, the most favorable market for the particular property involved. If a sale is required to permit payment to the department, the department may decline the highest bid and reoffer the property for sale if it considers the price offered insufficient. The sale shall be advertised by publication pursuant to KRS Chapter 424 in the county where the property was found or abandoned, and in the county where the sale is to be made. The sale shall be held at the courthouse door. Title XXXIV, Chap. 393, §393.120
Sale by department.
(1) Except as otherwise provided in this section, the department, within three (3) years of the receipt of abandoned property, may sell it to the highest bidder at a public sale at a location in the state which, in the judgment of the department, affords the most favorable market for the property. The department may decline the highest bid and reoffer the property for sale if the department considers the bid to be insufficient. The department need not offer the property for sale if the department considers that the probable cost of sale will exceed the proceeds of the sale. At least three (3) weeks prior to a sale conducted under this section, the department shall publish a notice of the sale in a newspaper of general circulation in the county in which the property is to be sold.
(2) Securities listed on an established stock exchange shall be sold at prices prevailing on the exchange at the time of sale. Other securities may be sold over the counter at prices prevailing at the time of sale or by any reasonable method selected by the department. If securities are sold by the department before the expiration of three (3) years after their delivery to the department, a person making a claim under this chapter before the end of the three (3) year period is entitled to the proceeds of the sale of the securities or the market value of the securities at the time the claim is made, whichever is greater, plus dividends, interest, and other increments thereon up to the time the claim is made, less any deduction for expenses of sale. A person making a claim under this chapter after the expiration of the three (3) year period is entitled to receive the securities delivered to the department by the holder, if they still remain in the custody of the department, or the net proceeds received from the sale, and is not entitled to receive any appreciation in the value of the property occurring after the delivery to the department, except in the case of intentional misconduct or malfeasance by the department.
(3) A purchaser of property at a sale conducted by the department pursuant to this chapter takes property free of all claims of the owner or previous holder and of all persons claiming through or under them. The department shall execute all documents necessary to complete the transfer of ownership. Title XXXIV, Chap. 393, §393.125
Rights and duties of persons who have transferred property to department.
(1) Upon the payment or delivery of abandoned property to the department, the state shall assume custody and shall be responsible for the safekeeping thereof. Any person who pays or delivers abandoned property to the department under this chapter is relieved of all liability which then exists or which thereafter may arise or be made in respect to the property.
(2) Any holder of property who has paid moneys to the department pursuant to this chapter may make payment to any person appearing to such holder to be entitled thereto, and upon proof of such payment and proof that the payee was entitled thereto, the department shall forthwith reimburse the holder or company, without imposing a fee or other charge. The department may accept a holder’s affidavit as sufficient proof of the holder’s right to recover money under this section.
(3) Notwithstanding the provisions of KRS 393.140, posting or advertising is not required in the event payment is made to persons entitled thereto by holders of deposits of life insurance companies in compliance with this section. The claim shall be paid without deduction for the cost of advertising or services provided in KRS 393.115.
(4) Upon payment or delivery of property presumed abandoned, other than money, by a holder to the department in accordance with this chapter, any person appearing entitled thereto shall receive from the department, in addition to proceeds from the liquidation or conversion of the property, any income or gain realized or accruing to the property at or before the liquidation or conversion of the same.
(5) Property that is held in an interest-bearing demand, savings, or time deposit shall, from the time that it is presumed abandoned in accordance with this chapter, be placed by the holder in an interest-bearing account made assignable to the department. The department, through its employees, may examine the records relevant to the establishment and maintenance of an interest-bearing account in accordance with KRS 393.280. Upon demand and proper proof by a person appearing entitled to payment of property or portions of property so deposited, the holder may withdraw the property and any accrued interest for payment to the person entitled thereto. Property so deposited and not claimed by a person appearing properly entitled to receipt shall be paid, with accrued interest, to the department ten (10) years after it is presumed abandoned or upon establishment of actual abandonment, whichever occurs first.
(6) Property removed from a safe deposit box or other safekeeping depository is received by the department subject to the holder’s right to be reimbursed for the cost of opening and to any valid lien or contract providing for the holder to be reimbursed for unpaid or other charges. The department shall reimburse the holder out of the proceeds remaining after deducting the expense incurred by the department in selling the property. Title XXXIV, Chap. 393, §393.130
Claim of interest in property surrendered to state.
(1) Any person claiming an interest in any property paid or surrendered to the state in accordance with KRS 393.020 to 393.050 who was not actually served with notice, and who did not appear, and whose claim was not considered during the action or at the proceedings that resulted in its payment to the state, may, within five (5) years after the judgment, file his claim to the property with the department.
(2) Any person claiming an interest in any estate or property paid or surrendered to the state in accordance with KRS 393.060 to 393.120, that was not subsequently adjudged under the procedure set out in KRS 393.230 to have been actually abandoned, or owned by a decedent who had no heir, distributee, devisee, or other person entitled under the laws of this state relating to wills, descent, and distribution to take the legal or equitable title, may file his claim to it at any time after it was paid to this state. Title XXXIV, Chap. 393, §393.140
State Treasurer to determine claims.
The State Treasurer shall consider any claim or defense permitted to be filed before the department and hear evidence concerning it. If the claimant establishes his claim, the State Treasurer shall, when the time for appeal or further legal procedure has expired, authorize payment to him of a sum equal to the amount paid into the State Treasury in compliance with this chapter. The decision shall be in writing and shall state the substance of the evidence heard by the State Treasurer, if a transcript is not kept. The decision shall be a matter of public record. Title XXXIV, Chap. 393, §393.150
Appeals from decision of State Treasurer.
Any person dissatisfied with the decision of the State Treasurer may, within sixty (60) days, appeal from it to the Franklin Circuit Court or file an action in that court to vacate the decision. In either event the proceedings shall be de novo, and no transcript of the record before the State Treasurer shall be required to be kept unless requested by the claimant. In the proceeding the State Treasurer shall be made a party defendant, and all other persons required by law to be made parties in actions in rem or quasi in rem shall be made parties. Any party adversely affected by the decision of the Franklin Circuit Court may appeal to the Court of Appeals in accordance with the Rules of Civil Procedure. Upon an appeal the state shall not be required to make a supersedeas bond. The provisions of this section relating to the decision of the State Treasurer and appeals therefrom shall also apply to a decision of the State Treasurer rendered under authority of KRS 393.110. Title XXXIV, Chap. 393, §393.160
Property in federal custody — Determination of whether escheat has occurred.
Whenever any property escheated under this chapter by reason of actual abandonment, or death or presumption of death of the owner without leaving any person entitled to take the legal or equitable title under the laws of this state relating to wills, or descent and distribution, has been deposited with, or in the custody or under the control of, any federal court in and for any district in this state, or in the custody of any depository, clerk or other officer of such court, or has been surrendered by such court or its officers to the United States Treasury, the Circuit Court of any county in which such federal court sits shall have jurisdiction to ascertain whether an escheat has occurred, and to enter a judgment of escheat in favor of the state. This section does not authorize a judgment to require such courts, officers, agents or depositories to pay or surrender funds to this state on a presumption of abandonment as provided in KRS 393.060 to 393.110. Title XXXIV, Chap. 393, §393.170
Proceedings instituted by county attorney on relation of State Treasurer.
Any legal proceeding to enforce KRS 393.020 to 393.050 and to recover any sum due the state thereunder shall be instituted, on the relation of the State Treasurer, by the county attorney of the county in which the property is located. The petition and all necessary pleadings shall be sent to the State Treasurer for his signature and approval. The petition shall be accompanied by an affidavit of the county attorney, stating the facts on which it is based. For all other pleadings, there shall be a statement by the county attorney of the reason for the particular pleading. Title XXXIV, Chap. 393, §393.180
Assistant Attorney General to aid county attorney.
On any action filed by a county attorney under the provisions of this chapter, the assistant Attorney General provided for in KRS 15.105 shall offer assistance and suggestions to the county attorney in the preparation of the petition or any pleadings, and revise and correct them as he considers necessary, subject to the ultimate approval of the State Treasurer, when he is required to sign them. Title XXXIV, Chap. 393, §393.190
State Treasurer may perform duties of county attorney.
If the county attorney declines to perform the duties imposed upon him by this chapter, they may be performed by the State Treasurer. When he considers it to the best interest of the state, the State Treasurer may institute any action authorized by this chapter to be brought by the county attorney, or join the county attorney in the active prosecution of the action. Title XXXIV, Chap. 393, §393.200
Property in two or more counties.
If the property of a person coming within the purview of KRS 393.020 to 393.050 is located in two (2) or more counties, all the property may be included in one (1) action. The county attorneys of all counties in which such property is located may join in the prosecution of the proceeding. Title XXXIV, Chap. 393, §393.210
Disposition of tangible property during proceeding.
Pending the outcome of an action, the court may make such disposition of the land or tangible personal property involved as it considers best from the standpoints of use, rents, interest and profits. If the use of the property is given to the claimant by the court, he shall be held accountable for returns and profits arising from it if the state is successful in the proceeding. Title XXXIV, Chap. 393, §393.220
Proceeding to force payment or surrender of intangible property — To establish actual abandonment.
(1) If any person or the agent of any court refuses to pay or surrender intangible property to the department as provided in KRS 393.060 to 393.110, an equitable proceeding may be brought on the relation of the State Treasurer to force payment or surrender. All property subject to KRS 393.060 to 393.110 may be listed and included in a single action.
(2) If any intangible property is turned over to the department on presumption of abandonment, in accordance with KRS 393.060 to 393.120, the State Treasurer may at any subsequent time institute proceedings to establish conclusively that it was actually abandoned, or that the owner has died and there is no person entitled to it. Title XXXIV, Chap. 393, §393.230
Actions may be joined — Procedure for action.
(1) If any person has property coming within the purview of KRS 393.020 to 393.050, and also of KRS 393.060 to 393.110, the actions required to be brought by the county attorney and the State Treasurer may be joined, but joinder is not required, and if separate actions are brought, they shall not be considered as coming within the rule against splitting a cause of action. The county attorney is not charged with the duty of enforcing sections KRS 393.060 to 393.120, 393.150, or 393.160.
(2) The procedure for all actions under this chapter shall be filed as equity actions and follow the procedure provided by the Rules of Civil Procedure, unless otherwise provided in this chapter. Title XXXIV, Chap. 393, §393.240
Source of payment of expenses — County attorney to collect judgments.
(1) Any necessary expense required to be paid by the state in administering and enforcing this chapter shall be paid out of the abandoned property receipts.
(2) The county attorney shall act as agent of the department for the collection of all judgments recovered in actions prosecuted by him under this chapter. He shall promptly remit the judgment recovered to the department with the information relating thereto as the department requires. Title XXXIV, Chap. 393, §393.250
Limitation of state’s action.
Any action brought by the state under this chapter shall be brought within fifteen (15) years from June 12, 1940 or from the time when the cause of action accrued, whichever is the later date. Title XXXIV, Chap. 393, §393.260
Person under disability, extension.
Any person under disability affected by this chapter shall have five (5) years after the disability is removed in which to take any action or procedure or make any defense allowed to one sui juris. Title XXXIV, Chap. 393, §393.270
Examination of records — Promulgation of rules — Delegation of State Treasurer’s authority.
(1) The department, through its employees, may at reasonable times and upon reasonable notice examine all relevant records of any person except any banking organization or financial organization where there is reason to believe that there has been or is a failure to report property that should be reported under this chapter during the preceding reporting period. Records shall be considered relevant to the examination of the preceding reporting period if they document the period necessary, for that type of property, to establish presumed abandonment.
(2) The Department of Financial Institutions may at reasonable times and upon reasonable notice examine all relevant records of any banking organization or financial organization if there is reason to believe that there has been or is a failure to report property that should be reported under this chapter during the preceding reporting period.
(3) Documents and working papers obtained or compiled by the department or the Department of Financial Institutions in the course of conducting an examination are confidential and are not open records under KRS 61.870 to 61.884.
(4) The State Treasurer may promulgate any reasonable and necessary rules for the enforcement of this chapter, and govern hearings held before him. He may delegate in writing to any regular employee of the department authority to perform any of the duties imposed on him by this chapter, except the promulgation of rules. Title XXXIV, Chap. 393, §393.280
Civil action to enforce production of reports or the surrender of property.
(1) The department may require the production of reports, or the surrender of property as provided in this chapter by civil action, including an action in the nature of a bill of discovery, in which case the defendant shall pay a penalty equal to ten percent (10%) of all amounts that he is ultimately required to surrender. This penalty shall not exceed five hundred dollars ($500).
(2) Any person who in good faith contests the applicability of this chapter to him may be relieved of the threat of any penalty by posting a compliance bond in an amount and of surety sufficient to the court. Title XXXIV, Chap. 393, §393.290
Restriction on escheat of real property held by lending corporation under supervision.
No person shall institute proceedings to escheat real property the title to which was acquired by any lending corporation in satisfaction of debts previously contracted in the course of its business, or that it purchases under a judgment for any such debt in its favor, if such lending corporation is under the supervision of the department of financial institutions of this state, comptroller of currency of the United States or any other duly constituted supervising banking authority, state or Federal, without first obtaining the consent of the supervising authority having supervision over that corporation. Title XXXIV, Chap. 393, §393.300
Any person who refuses to make any report as required by this chapter shall be fined not less than fifty dollars ($50) nor more than two hundred dollars ($200), or imprisoned for not less than thirty (30) days nor more than six (6) months, or both. Title XXXIV, Chap. 393, §393.990