United States

California: Governor Signs Legislation Adopting Unclaimed Property Changes for Banking & Financial Institutions

Oct 03, 2016
From KPMG TaxWatch

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California’s unclaimed property law provides that certain types of checking and savings accounts, matured time deposits, and matured investment certificates (and similar accounts) held at banking and financial institutions will escheat to the state if the owner, for more than three years, has not “increased or decreased the amount of the deposit.” California Assembly Bill 2258, which was recently signed into law by Governor Brown, clarifies that certain electronic transactions—including recurring elections—will be considered evidence that the owner of the account has increased or decreased the amount of a deposit. Therefore, if one of these actions occurs, it will effectively toll the period before which property is considered abandoned. The newly articulated activities include: (1) a single or recurring debit transaction authorized by the owner; (2) a single or recurring credit transaction authorized by the owner; (3) recurring transactions authorized by the owner that represent payroll deposits or deductions; or (4) recurring credits authorized by the owner or a responsible party that represent the deposit of any federal benefits. Holders of unclaimed property must regard these activities as an increase or decrease to a deposit commencing on or before January 1, 2018. Please contact Will King at 214-840-6107 with questions on Assembly Bill 2258.

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The following information is not intended to be "written advice concerning one or more federal tax matters" subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230.

The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.