Illinois Administrative Code › Title 74 - PUBLIC FINANCE › Part 760 - REVISED UNIFORM UNCLAIMED PROPERTY ACT › Subpart I - MISCELLANEOUS › Appendix A - Background Information

Current through Register Vol. 48, No. 28, July 12, 2024
a) Section 15-1501 of the Act provides that,
when
				  applying and construing the Act
,
consideration must be given
				  to the need to promote uniformity of the law with respect to its subject matter
				  among states that enact it.
[ 765 ILCS 15 -1501]. Given the provisions
				  of Section 15-1501, this Appendix is intended to provide background that will
				  be useful to persons attempting to interpret the Act.
b) Every state has enacted legislation requiring that holders
				  of presumptively abandoned or unclaimed property report and deliver that
				  property to the state. A majority of states have adopted some form of one of
				  the uniform acts promulgated by the Uniform Law Commission (ULC). The problem
				  of "lucrative silence" by holders motivated the ULC to draft and promulgate the
				  original Uniform Disposition of Unclaimed Property Act (UDUPA) in 1954.
				  Illinois passed its version of UDUPA in 1961. Illinois' current law is based on
				  the ULC's Revised Uniform Unclaimed Property Act (RUUPA) that was approved and
				  recommended for enactment in all states in 2016.
c) Various courts have attempted to lay out the purposes of
				  state unclaimed property laws. The Minnesota Supreme Court summarized the four
				  main purposes as:
1) to protect the interests of the owners of
				  unclaimed property;
2) to relieve holders of the annoyance, expense
				  and liability of keeping unclaimed property;
3) to preclude multiple liability; and
4) to give the adopting state use of considerable
				  sums of money that otherwise is a windfall to holders. (State by Lord v. First
				  National Bank, 313 N.W.2d 390, 393 (Minn. 1981))
d) Illinois' Appellate Court noted that Illinois' unclaimed
				  property Act "protects the rights of unknown owners and gives the benefit of
				  the use of the unclaimed property, most of which experience shows will never be
				  claimed, to the State rather than the holders." (People ex rel. Fahner v.
				  Chicago Transit Authority, 127 Ill. App. 3d 405, 408, 468 N.E.2d 1316, 1318
				  (1st Dist. 1984) citing People ex rel. Callahan v.
				  Marshall Field & Co. (1980), 83 Ill. App. 3d 811, 404 N.E.2d 368; and
				  Douglas Aircraft Co. v. Cranston (1962), 58 Cal. 2d 462, 374 P.2d 819)
e) State unclaimed property Acts prevent the unjust
				  enrichment by holders of property to which they are not legally entitled and
				  establish a process through which unclaimed property may be reunited with its
				  rightful owner. These statutes essentially abolish the common law on abandoned
				  property and remove the escheatment by the state of intangible personal
				  property. The state no longer becomes the legal owner of unclaimed intangible
				  personal property. Instead, it is transferred to a state unclaimed property
				  administrator, typically the State Treasurer, who serves as a perpetual
				  custodian of the unclaimed property.
f) The Uniform Unclaimed Property System
1) The uniform unclaimed property Acts, including
				  Illinois' Act, set up a system for dealing with unclaimed intangible property
				  as well as tangible unclaimed property recovered from safe deposit boxes. Each
				  state's Act establishes rules to determine when different types of property are
				  presumed abandoned. After property is presumptively abandoned, the holder of
				  the property is almost always required to attempt to contact the owner of
				  unclaimed property in writing. This is called a due diligence notice. If the
				  owner does not claim the property from the holder, then the holder is required
				  to report and remit that property to the state unclaimed property administrator
				  as part of an annual unclaimed property report.
2) The administrator once again attempts to
				  contact owners. Historically, this was done through newspaper advertisements;
				  now, however, in addition to print advertising, states maintain searchable
				  online databases, work with other government agencies to update contact
				  information for owners, send direct mail to apparent owners, and perform other
				  types of in-person outreach and media advertising to attempt to reunite owners,
				  or their heirs, with their unclaimed property.
3) Cash remitted to the administrator is deposited
				  into a state fund. Non-cash property is held for a period of time and then sold
				  if the owner has not been located, with the proceeds being deposited into the
				  same state fund. Owners can claim their property from the administrator using
				  online or paper claim forms and, when necessary, by supplying supporting
				  documentation to prove that they are the rightful owner. There is no deadline
				  for an owner to reclaim his or her property from the administrator.
g) The U.S. Supreme Court has established federal common law
				  rules to determine which state is entitled to unclaimed property. The cases of
				  Texas v. New Jersey, 379 U.S. 674 (1965), Pennsylvania v. New York, 407 U.S.
				  206 (1972), and Delaware v. New York, 507 U.S. 490 (1993) have established the
				  framework to determine which state has priority in claiming unclaimed
				  property.
h) The Act is not identical to the version of RUUPA
				  promulgated by the ULC. The ULC version, including the official comments, is
				  available at
www.uniformlaws.org
.
				  While the General Assembly chose to adopt great portions of the version of
				  RUUPA promulgated by the ULC, certain provisions from the Former Act were
				  retained, language from prior versions of the uniform Act were used in places,
				  and sometimes provisions were modified or entirely rewritten. However, the Act,
				  Illinois' version of RUUPA, contains all of the elements of modern unclaimed
				  property law discussed in this Appendix.