Abandoned Property Regulations
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960 CMR 4.00: PROCEDURES FOR THE ADMINISTRATION OF ABANDONED
PROPERTY
Section
4.01: Scope and Purpose
4.02: Definitions
4.03: Reporting Abandoned Property
4.04: Claims Process
4.05: Tangible Property
4.06: Procedures for Interaction with Heir Finders
4.07: Audit Program
4.08: Amnesty
4.09: Revocation of Prior Policies, Rulings and Agreements
4.10: Severability
4.01: Scope and Purpose
960 CMR 4.00 establishes and clarifies procedures for the
administration of the Abandoned Property Division in the
Department of the State Treasurer and is promulgated by
the Department of the State Treasurer pursuant to M.G.L.
c. 200A, § 13A. Issues not addressed in 960 CMR 4.00
for which any party seeks clarity are to be considered in
light of the entire M.G.L. c. 200A.
4.02: Definitions
Unless otherwise enumerated below, all definitions associated
with 960 CMR 4.00 shall be the definitions outlined in M.G.L.
c. 200A.
Activity: Action taken by an owner with
respect to his or her property which indicates that the owner
intends for the property not to be presumed abandoned. Examples
of owner activity include, but are not limited to: an owner-initiated
deposit or withdrawal or posting of interest on a piece of
property, such as a savings or checking account; notification
to a holder of change of owner address; payment of an installment
loan, such as a mortgage, equity loan or automobile loan;
payment of a safe deposit box rental fee; and any action,
such as written correspondence, e-mail message, fax, telephone
call or person-to-person conversation between an owner and
a holder or his/her representative, which can be documented
so as to indicate an owner’s interest in his or her property
not being presumed abandoned.
Administrator/trix: A person appointed by
a court to settle the estate of a person for whom no last
will and testament has been admitted to a probate court of
competent jurisdiction.
Agent: A person or entity that conducts
an abandoned property examination/audit on behalf of the Treasurer.
Aggregate Property: Intangible property
with a value of less than $100.00 which has been sent to the
State Treasury by a holder in a “lump sum” pursuant to M.G.L.
c. 200A, § 7(b)(3), or property with a value of $100.00
or greater for which a holder does not have the name or address
of the owner in its records.
AP-1 Form: A form prescribed by the Treasurer
for the annual reporting of abandoned property.
Assistant Treasurer: The Assistant Treasurer
for Abandoned Property.
Book Entry Shares: Electronic form of holding
shares between a depository and a participant.
Burial Account: An account opened for the
purpose of paying the final expenses associated with a funeral.
In most cases, burial accounts are pre-paid and are held in
custody by a funeral director.
Claimant: A person(s) or legal entity legally
entitled to claim abandoned property held in custody by the
Abandoned Property Division. A claimant may be an original
owner or the court- appointed representative of an original
owner or his/her estate.
Commercial Customer: Any person who maintains
a current, multiple transaction, commercial relationship with
a vendor in the conduct of the person’s business within Massachusetts
or through a vendor conducting business in Massachusetts.
No individual purchasing goods or services in his/her capacity
as a consumer at retail shall be considered a commercial customer.
Conservator: A person who is court-appointed
to legally hold, manage and safeguard the value of another
person’s property.
Credit Balances: Outstanding balances that
are recorded as current accounts receivable or accounts payable
of a holder. The balance must have been generated in the normal
and ordinary course of business between the holder and a then
current commercial customer.
Director: The Director of Auditing in the
Abandoned Property Division.
Division: The Abandoned Property Division.
Dormancy Period: The period of time during
which an owner of property takes no action with respect to
his or her property, after which the property is presumed
abandoned and must be remitted to the Division unless claimed
beforehand.
Due Diligence: Written notice sent by a
holder after the appropriate dormancy period has elapsed that
informs the owner that his/her property will be turned over
to the State Treasury as abandoned property unless the owner
contacts the holder.
Executor/trix: A person named in a will
to administer and carry out the last will and testament of
a deceased person.
False or Fraudulent Return: A report issued
to the Division and signed by an authorized representative
of a holder which contains information known by the authorized
representative or other officer involved in the preparation
of the report to be fraudulent or false as it applies to any
material matter contained in the report.
Guardian: A person who has legal responsibility
for the care and well being of another person who is either
a minor or incompetent to manage their own affairs.
Heirfinder: A person or entity that, for
a fee, assists a property owner in making a claim for abandoned
property, or locates the owner of property on behalf of a
holder.
Holder: The entity that has custody of abandoned
property until it is claimed by the owner of the property
or transferred to the Division in accordance with the provisions
of M.G.L. c. 200A.
Holder Certification: A written statement
from an abandoned property holder certifying that the holder
has reported certain abandoned property to the State Treasury.
Insufficient Return: a report issued to
the Division and signed by an authorized representative of
a holder that is subsequently determined by a review of the
Division, its agent or representative to have underreported
the value of the abandoned property by 50% or more of what
is ultimately determined to be owed within any individual
abandoned property reporting code.
Intangible Property: Money, money orders,
checks, drafts, deposits, interest, dividends, income and
bonds; credit balances, customer overpayments, gift certificates,
security deposits, refunds, credit memos, unpaid wages, unused
airline tickets, mineral proceeds and unidentified remittances;
stocks and other intangible ownership interests in business
associations; money deposited to redeem stocks, bonds, coupons
and other securities, or to make distributions; amounts due
and payable under the terms of an annuity or insurance policy;
amounts distributed from a trust or custodial fund established
under a plan to provide any health, pension, vacation, severance,
retirement, death, stock purchase, profit sharing, employee
savings, supplemental unemployment insurance, or similar benefit,
as defined in M.G.L. c. 200A, § 1.
Joint Account: An account payable on request
to one or more of two or more parties, whether or not mention
is made of any right of survivorship.
Joint Tenant, or With Right of Survivorship (WROS):
An original owner who holds property jointly with another
original owner(s). When one tenant dies, the entire tenancy
remains to the surviving tenant(s).
Legal Representative of the Owner: A person,
other than the original owner, claiming property on behalf
of the original owner as an executor/trix or administrator/trix
of an estate, as a conservator or guardian, or an authorized
agent appointed in accordance with a properly-executed power
of attorney.
Lessee: The person or persons in whose name
or names a safe deposit box stands on the books of a bank
or credit union, as the term is used in 960 CMR 4.05.
Negative Report: An abandoned property report
filed by a holder in which the holder affirms that it has
no property to report to the Division.
Normal and Ordinary Course of Business:
The sale of goods or services to the general public and/or
to others as part of a vendor’s overall business purpose and
activity, as well as the purchase of goods and services from
a vendor for the purpose of supporting a commercial customer’s
overall business purpose and activity.
Notarized Signature: Signature of a claimant
witnessed by a person who is an official Notary Public (appointed
by the property appointing authority in a given state) attesting
to the validity of the signature of a person who appears before
him/her.
Original Document: The actual written document
issued by an authority or government entity legally empowered
to issue documents, such as a court, city or town clerk, attorney
or any official keeper of records, or any other agreement
or understanding legally executed between two or more parties,
or any document which is considered an original document pursuant
to P.L. 106-229, the Electronic Signatures in Global and National
Commerce act (known as “E-SIGN”).
Original Owner: A person (or persons) listed
in the UPS System as the rightful owner, as reported from
the records of the holder of the property.
Owner: A person or entity having a legal
or equitable claim to abandoned property.
Power of Attorney: A legal document in which
a person gives another person authority to act for him/herself.
Reciprocity Agreement: An agreement between
states in which property held in the name of out-of-state
owners is collected and exchanged.
Surety Bond: Indemnity coverage for the
State purchased by an owner before a duplicate security or
check is issued to replace one that has been lost. The indemnification
guarantees payment if the original security or check is produced
at a later date for redemption or payment, by a person other
than the original claimant, as a valid claim to the property
previously paid by the Division.
Tangible Property: The contents of safe
deposit boxes, which are turned over to the Division as abandoned
property by a bank pursuant to M.G.L. c. 158, § 17, or
by a credit union pursuant to M.G.L. c. 171, § 75, or
any other tangible property transferred to the Division as
abandoned property in accordance with the terms of M.G.L.
c. 200A.
Tenant in Common: An original owner who
owns an undivided interest in a piece of property. When the
owner dies, his/her interest passes to his/her estate.
True Attested/Certified Copy: Copy of an
original document that is issued by a court or other government
entity and displays a raised seal and/or original signature
of the issuing authority certifying that the copy is a true
copy of the original.
Trust: A legal arrangement whereby control
of an account or property is transferred to a person or organization
(trustee) for the benefit of another person (beneficiary).
UGMA (Uniform Gift to Minors Act) Account:
An account opened for the benefit of a minor under the age
of 21. Abandoned property from such accounts can only be paid
to the appointed trustee in the name of the minor until the
minor reaches the age of 21. When a minor beneficiary of a
UGMA account reaches the age of 21, any abandoned property
held for his/her benefit as a UGMA account shall become his/her
sole property. A transfer made in accordance with the Uniform
Gift to Minors Act will be treated as a transfer made in accordance
with the Uniform Transfers to Minors Act (UTMA), as codified
in M.G.L. c. 201A, except insofar as the application would
impair constitutionally vested rights or extend the duration
of a custodianship in existence as of January 30, 1987.
Undeliverable Shares: Securities returned
by the U.S. Post Office (known as RPO) or any other certified
private carrier as undeliverable.
Underlying Shares: Original shares of stock
which have been issued by a business association, corporation,
banking or financial organization, are not in the possession
of the issuer and presumably are in the possession of the
owner.
UPS System: The abandoned property records-keeping
system maintained by the Division.
UTMA (Uniform Transfers to Minors) Account:
An account opened for the benefit of a minor under the age
of 21. Abandoned property from such accounts can only be paid
to the appointed trustee in the name of the minor until the
minor reaches the age of 21, as codified in M.G.L. c. 201A.
When a minor beneficiary of a UTMA account reaches the age
of 21, any abandoned property held for his/her benefit as
a UTMA account shall become his/her sole property.
Vendor: Any person or entity that sells
goods or services in the ordinary course of business.
4.03: Reporting Abandoned Property
-
Required Information for Reporting.
All reporting of abandoned property must be done in accordance
with M.G.L. c. 200A, § 7. Reports submitted to the
Division must be in a format approved by the Treasurer
and must include the following:
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(a) a completed and notarized AP-1 Form;
(b) a statement that all due diligence requirements
of the law have been met by the holder, signed under
the
pains and penalty of perjury, along with a copy of
a sample due diligence letter;
(c) an electronic copy of the report (magnetic tape
or diskette) in the file format currently approved
by the National Association of Unclaimed Property
Administrators (NAUPA);
(d) in the case of cash property, a certified check
or money order made payable to the Commonwealth of
Massachusetts or an Electronic Funds Transfer (EFT)
(wiring instructions available at the Division);
(e) in the case of securities, a Depository Trust
Company (DTC) transfer to the Division (DTC instructions
available at the Division), or, in the case of non-DTC
eligible securities, direct delivery or transmittal
to the Division;
(f) confirmation statements must be included if mutual
fund or dividend reinvest accounts are remitted; |
- Negative Reports. Negative reports may
be filed on the AP-1 Form only and not electronically.
- Disposition of Property. All cash property
not associated with securities shall be deposited daily
into the Massachusetts “Abandoned Property Trust Fund.”
All records of cash deposits shall be entered daily into
the Division’s UPS System. All securities and associated
cash, such as dividends, shall be held by the custodian(s)
designated by the Division.
- Required Information.
| (a) All abandoned property holder reports
submitted to the Division must include, to the extent
such information is available to the holder, the following
information: |
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1. owner’s name;
2. owner’s last known address;
3. owner’s Social Security or Federal tax identification
number (TIN);
4. owner’s date of birth and policy number (for life
insurance companies);
5. beneficiary’s Social Security number (for life
insurance companies);
6. owner’s account number (for financial institutions);
7. check numbers, amounts and dates (for checks and
money orders);
8. maker(s) of check(s), if available;
9. date of last activity or contact with owner; |
(b) If submitting checks with unknown owners, holders must
insert the word “unknown” in the last name field along with
other property identification information required by 960
CMR 4.03(4).
- Rejection of Abandoned Property Reports.
The Assistant Treasurer reserves the right to reject the
report of any holder whose report is not received within
30 calendar days of the statutory reporting deadline, unless
the holder has received an extension for reporting pursuant
to M.G.L. c. 200A, § 13B. The Division shall notify
every holder whose report is rejected by sending a registered
letter to the holder within five business days of rejection
of the report. Rejected reports shall be returned to the
holder to be resubmitted in compliance with M.G.L. c. 200A,
§ 7.
- Penalty.
(a) In accordance with M.G.L. c. 200A, § 12(c), any
holder determined to have violated the provisions of M.G.L.
c. 200A, § 7, shall be liable to a penalty of not more
than $500.00.
(b) In accordance with M.G.L. c. 200A, § 12(e), any
holder determined to have failed to file an abandoned property
report within the time prescribed by M.G.L. c. 200A, §
7, including those rejected in accordance with 960 CMR 4.03(5),
shall pay the Treasurer interest at the rate allowed by
M.G.L. c. 200A, § 12(e).
- Provision of Additional Information to the Division
on Abandoned Property Reports. Holders of property
with a value of less than $100.00 are strongly encouraged
to submit all information contained in 960 CMR 4.03(4),
if it is readily available, so as to strengthen the Division’s
efforts to reunite all rightful owners with their abandoned
property.
- Reciprocity Agreements with Other States.
(a) The Division shall accept reports containing property
of non-Massachusetts residents who are owners of property
held by Massachusetts holders if the state in which the
owner resides has entered into a reciprocity agreement with
the Treasurer. The Division shall maintain an up-to-date
list of all states with which it is party to a reciprocity
agreement.
(b) Holders incorporated in Massachusetts or non-corporate
holders with a principal place of business in Massachusetts
that wish to report abandoned property for customers who
live outside Massachusetts should report the property to
the respective state(s) in which those customers resided
at the time their property became reportable according to
the laws of that/those state(s).
- Holder Due Diligence Requirements.
(a) In accordance with M.G.L. c. 200A, § 7A, a due
diligence notice must be sent by first-class mail to every
owner’s last known address at least 60 days prior to the
filing of abandoned property reports with the Division.
Nothing in 960 CMR 4.03(9) shall preclude holders from taking
additional measures to contact owners before remitting their
property to the Division.
(b) Due diligence notices sent to owners of property presumed
abandoned pursuant to M.G.L. c. 200A shall include, but
not be limited to, the following information:
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1. a description of the property, including account
number, policy number or other identifying information;
2. a statement explaining that state law requires
holders of abandoned property to report and remit
such property to the Division after a designated dormancy
period (usually three years);
3. the date the property will be remitted to the Division
if there is no owner contact. |
- Holder Penalty for Failure to Perform Due Diligence
Requirements. Any holder who knowingly fails to
provide due diligence notice as required by 960 CMR 4.03(9)
shall be subject to a fine of $1.00 for each owner whose
property is remitted to the Division by the holder, or $1,000.00,
whichever is greater.
- Activity. No owner’s property reportable
pursuant to M.G.L. c. 200A, § 3 shall be remitted to
the Division if the owner maintains an active relationship
with a holder with respect to any property of the same owner.
This activity shall extend to all accounts, such as trust
or investment accounts, which do not normally require activity
within the standard period of dormancy described above.
However, a “notice of inactivity” shall be sent to the owner
of any piece of property presumed abandoned by virtue of
dormancy, regardless of whether the property is subject
to being remitted to the Division or whether the owner has
other active property being held by the same holder.
- Reporting Procedures for Individual Retirement
Accounts (IRAs), Defined Benefit Plans, or Other Accounts
or Plans Qualified for Tax Deferral under the Income Tax
Laws of the United States. Property in an individual
retirement account, defined benefit plan, or other account
or plan that is qualified for tax deferral under the income
tax laws of the United States shall be reported as abandoned
property three
years after the earliest of the following dates: the date
of the distribution or attempted distribution of the property,
the date of the required distribution as stated in the plan
or trust agreement governing the plan, or the date specified
in the income tax laws of the United States by which distribution
must begin in order to avoid a tax penalty.
- Exemption for Reporting Certain Credit Balances.
(a) Pursuant to the reporting requirements detailed in M.G.L.
c. 200A, §§ 5 and 7, an exemption shall exist
for any outstanding credit balances between vendors or commercial
customers resulting from a transaction occurring in the
normal and ordinary course of business. This exemption shall
apply to all prior and current reporting years.
(b) Credit balances, as defined in 960 CMR 4.02, shall not
be considered abandoned property, in accordance with M.G.L.
c. 200A, § 5. Credit balances may originate from activities
such as customer overpayments and shall include balance
sheet credits, such as the payment to vendors for the purchase
of goods and services.
(c) Nothing in 960 CMR 4.03 should be construed so as to
suggest that any commercial customer incorporated or registered
to do business in Massachusetts is exempt from abandoned
property reporting obligations relative to credit balances,
as defined in 960 CMR 4.02, in other domestic reporting
jurisdictions outside of Massachusetts.
- Reporting Procedures for Certificates of Deposit.
(a) The dormancy period for any Certificate of Deposit (CD)
shall be deemed to commence upon the initial maturity date
of the certificate. Thereafter, certificates of deposit
shall be presumed abandoned in accordance with the provisions
of M.G.L. c. 200A, § 3.
(b) If a Certificate of Deposit reaches its initial maturity
date and automatically “rolls over”, the Certificate becomes
reportable as abandoned property three years following the
maturity date of the first “rollover”, unless the owner
consents to renewal at or about the time of renewal by communicating
with the person holding the property pursuant to M.G.L.
c. 200A, § 3A. An automatic “roll over” of a Certificate
of Deposit is not considered owner activity despite the
fact that an initial agreement between the holder and owner
may include an automatic “rollover” provision that requires
no action by the owner.
For purposes of the application of 960 CMR 4.03(14)(b),
a six month Certificate of Deposit would be reported as
abandoned property four years from the date the account
was opened, a one-year Certificate of Deposit would be reported
as abandoned property five years from the date the account
was opened, and a three-year Certificate of Deposit would
be reported as abandoned property nine years from the date
the account was opened.
(c) If, at the time provided for remittance of a dormant
Certificate of Deposit in 960 CMR 4.03(14)(b), a penalty
or forfeiture in the payment of interest would result from
the remittance of the property, the time for remittance
is extended until the time when no penalty or forfeiture
would result.
For purposes of the application of 960 CMR 4.03(14)(c),
a five-year Certificate of Deposit would be reported as
abandoned property 15 years from the date the account was
opened.
- Holder Fees.
(a) In accordance with M.G.L. c. 200A, § 15C, a holder
of savings/checking accounts may assess a charge or fee,
including an abandoned property processing fee, for accounts
that become inactive, provided that the charge or fee is:
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1. expressed in a valid, enforceable and written
contract between the holder and the customer specifying
the amount of the charge or fee;
2. the customer is notified prior to the imposition
of the charge or fee; and
3. it is not the policy of the holder to waive the
charge or fee. |
(b) Any charge or fee shall be listed in a holder’s periodic
schedule of charges and fees and shall be provided to every
customer upon the opening of his/her account.
(c) If a holder of savings/checking accounts advises a customer
of an increase in a charge or fee, or the imposition of
a new charge or fee, and the notice is included in a statement
to a customer that is returned as undeliverable, then the
financial institution shall not impose the new or higher
charge or fee.
- Retention of Owner Records. Any holder
who submits an abandoned property report pursuant to M.G.L.
c. 200A, § 7, and 960 CMR 4.03(1), shall maintain all
owner records and other information submitted in the report
for a period of six years following the remittance of the
holder’s records and information to the Division.
4.04: Claims Process
- Issuance of a Claim Form.
(a) Claim forms shall only be issued to persons identified
by Division staff as having a valid interest in a certain
property/properties. A person shall be declared as having
an interest in the property if he/she if one of the following:
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1. the original owner or an officer of a corporation
or business which is an original owner or legal successor;
2. a person with a court appointment, such as an administrator/trix
or executor/trix;
3. a person duly appointed as the power of attorney
for the original owner;
4. a guardian, trustee, conservator or other court-appointed
legal representative;
5. an individual who has petitioned a court of proper
jurisdiction for appointment as the legal representative
of the original owner |
(b) Prior to the issuance of a claim form, an employee of
the Division must verify the original owner’s address and
Social Security/Federal Tax Identification Number (TIN),
unless such claim is for a piece of property which may have
been reported to the Division in “aggregate” form or the
Division has no record of the original owner’s name and/or
address or Social Security/TIN.
(c) The Division will not issue a claim form prior to the
receipt of the Social Security/TIN and current mailing address
of any individual or entity claiming property held by the
Division.
(d) In the case of a person claiming property on behalf
of an estate, that person must provide the Division with
the Tax Identification Number (TIN) of the estate or his/her
own Social Security number, and not the Social Security
number of the deceased.
- Required Documentation for Claims
(a) Claims by Original Owner:
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1. For cash claims valued between $0 and $4,999
– signature of claimant and/or co-owner, date of signature
and Social Security/TIN number of claimant; holder
certification, if applicable; proof of former residence,
if reported; passbook or monthly statement, if applicable;
original check or surety bond, if applicable; and
other documentation as may be required by the Division
to substantiate the validity of the claim.
2. For cash claims valued $5,000 and greater – signature
of claimant and/or co-owner, date of signature and
Social Security/FEIN number of claimant; holder certification;
proof of former residence, if reported; passbook or
monthly statement, if applicable; original check or
surety bond, if applicable; and other documentation
as may be required by the Division to substantiate
the validity of the claim.
3. For aggregate cash claims – signature of claimant
and/or co-owner; date of signature and Social Security/TIN
number of claimant; holder certification; and other
documentation as may be required by the Division to
substantiate the validity of the claim.
4. For shares of stock or mutual funds (except for
undeliverable shares and book entry shares) – signature
of claimant and/or co-owner, date of signature and
Social Security/TIN number of claimant; holder certification
(unless property was turned over to the Division by
a third-party reporting service), if applicable; proof
of former residence, if reported; original stock certificate(s)
or surety bond; lost stock affidavit, if applicable;
monthly statement, if applicable; and other documentation
as may be required by the Division to substantiate
the validity of the claim. |
(b) Claims by Legal Representative of the Owner:
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1. For cash claims valued between $0
and $4,999 – signature of claimant, date of signature
and Social Security/TIN number of claimant; holder
certification, if applicable; copy of deceased owner’s
death certificate (for joint tenant and joint accounts),
if applicable; copy of original owner's death certificate
and certified copy of claimant’s appointment as executor/trix,
guardian, administrator, or conservator, if applicable;
copy of claimant’s power of attorney, if applicable;
copy of marriage certificate, if applicable; proof
of former residence, if reported; passbook or monthly
statement, if applicable; original check or surety
bond, if applicable; and other documentation as may
be required by the Division to substantiate the validity
of the claim.
2. For cash claims valued $5,000 and greater – signature
of claimant, date of signature and Social Security/TIN
number of claimant; holder certification; copy of
deceased owner’s death certificate (for joint tenant
and joint accounts) if applicable; copy of original
owner’s death certificate and certified copy of claimant’s
appointment as executor/trix, guardian, administrator
or conservator, if applicable; original check or surety
bond, if applicable; and other documentation as may
be required by the Division to substantiate the validity
of the claim.
3. For aggregate cash claims – signature of claimant,
date of signature and Social Security/TIN number of
claimant; holder certification; copy of deceased owner’s
death certificate (for joint tenant and joint accounts),
if applicable; copy of original owner’s death certificate
and certified copy of claimant’s appointment as executor/trix,
guardian, administrator or conservator, if applicable;
original check or surety bond, if applicable; and
other documentation as may be required by the Division
to substantiate the validity of the claim.
4. For shares of stock or mutual funds (except for
undeliverable shares and book entry shares) – signature
of claimant, date of signature and Social Security/TIN
number of claimant; holder certification if original
shares are not available (unless property was turned
over to the Division by a third-party reporting service),
if applicable; copy of deceased owner’s death certificate
(for joint tenant and joint accounts), if applicable;
copy of original owner’s death certificate and certified
copy of claimant’s appointment as executor/trix, administrator,
guardian or conservator, if applicable; copy of claimant’s
power of attorney, if applicable; copy of marriage
certificate, if applicable; proof of former residence,
if reported; original stock certificate(s) or surety
bond; monthly statement, if applicable; and other
documentation as may be required by the Division to
substantiate the validity of the claim. A letter from
a transfer agent or broker stating that the original
shares have been confiscated by the agent per Securities
and Exchange Commission (SEC) regulations may be submitted
in lieu of the original certificate(s). |
(c) Signature Requirements – If any property, such as an
account, is held jointly, then the signatures of all original
owners, unless one is deceased, must appear on the claim
form before it can be approved at any level within the Division.
If one of the original owners of an account held as a tenant
in common is deceased, the lawful representative of the
decedent’s estate must sign the claim form along with the
other original owner before it can be approved at any level
within the Division. However, if any property, such as an
account, is held as a joint tenant or “with right of survivorship”
(WROS) or as a joint account, the signature of one of the
original owners shall be deemed sufficient to satisfy the
signature requirement before approval of any rightful claim
against the property.
- Approval of Claims. Each claim submitted
to the Division must receive three levels of approval on
the UPS System prior to payment.
(a) Level One approval shall first be required from the
Division staff person(s) who sent out the original claim
form. This approval shall be given if it is determined that
the claimant has submitted all documentation requested when
the claim form was sent out from the Division. If any documentation
is missing when a claim form is sent to the Division for
approval, the claim form shall be returned to the claimant
by the Division staff person who originally sent it out
with a letter explaining what documentation is missing from
the claimant’s submission. Level One approval shall then
be entered into the UPS System only if all required documentation
is subsequently submitted by the claimant.
(b) Level Two approval shall be required from the Division
staff person(s) designated to approve claims at such level.
This person shall closely inspect all Level One claims and
determine whether the proper documentation was requested
and received. If either of these two criteria are not met,
the claim shall be rejected in the UPS System and returned
to the Level One staff person who originally sent out the
claim form to effect the necessary changes, and shall not
be entered into the UPS System as approved at Level Two
until the Level One approval of the claim has been judged
to be complete and accurate. Level Two staff persons shall
also have Level One approval authority (along with the ability
to send out claims). However, no Level Two staff person
shall approve the same claim at both Level One and Level
Two of the claims approval process.
(c) Level Three approval shall be required from the Division
staff person(s) designated to approve claims at this level.
This person shall verify that all documentation requested
be in order and that Level One and Level Two approvals have
been property granted. Level Three approval shall then be
entered into the UPS System.
- Payment of Claims.
(a) In the case of cash claims, Level Three approval shall
result in the electronic transfer of the claims approval
data to the Office of the State Comptroller, where the individual
claims shall be paid by check.
(b) In the case of stock and mutual fund claims, Level Three
approval shall result in a letter being sent to a third-party
agent responsible for the transfer of ownership of the stocks/mutual
funds, instructing the agent to have ownership of the appropriate
number of shares of the property re-registered in the name
of the claimant.
- Reimbursements. In the case of a reimbursement
requested by a holder due to property having been sent to
the Division in error, Level Three approval shall be granted
by the Division within 60 days of the receipt by the Division
of all documentation which may be required by the Division
to substantiate the validity of the reimbursement request.
4.05: Tangible Property
- Reporting of Contents of Safe Deposit Boxes and
Other Tangible Property The contents removed from
any safe deposit box pursuant to M.G.L. c. 158, § 17,
and M.G.L. c. 171, c.75, and any other tangible property
delivered to the Division pursuant to M.G.L. c. 200A, shall
be placed in packages approved by the Division. It shall
be the responsibility of any holder that delivers the contents
of safe deposit boxes and any other tangible property to
the Division to separate any lessee’s tangible property
from his/her intangible property and label packages containing
each type of property accordingly. All
contents of safe deposit boxes shall be sent to the Division
“as is” and shall not be replaced or converted to any other
form of currency or legal tender by the bank or credit union.
For example, no coins shall be converted to cash or check
before delivery to the Division and no old paper money shall
be replaced by newer currency.
- Inventory Sheet. All items removed from
a safe deposit box pursuant to M.G.L. c. 158, § 17,
and M.G.L. c. 171, § 75, and all other tangible property
delivered to the Division shall be listed on an inventory
sheet approved by the Division, which is to be distributed
to all banks and credit unions and other holders of tangible
property. Such sheet shall, in addition to listing the name
of the lessee(s) or owner(s) and his/her last known address
and Social Security number, indicate, in the case of safe
deposit boxes, the bank and branch of origin where the safe
deposit box is located, along with the date the safe deposit
box was opened. The original of such sheet shall be placed
in the package along with the contents of the safe deposit
box or other tangible property being delivered to the Division.
Additionally, one copy of the sheet shall be affixed to
the exterior of the package and one copy shall be retained
by the bank, credit union or other holder of tangible property
for a period of six years from the date the package is delivered
to the Division.
- List of Owners. Each bank or credit union
which delivers the contents of safe deposit boxes to the
Treasurer and other holders of tangible property shall,
for each report year in which tangible property is delivered
to the Division, make a list of all owners whose property
has been delivered to the Division, along with the owners’
last known addresses, Social Security numbers and safe deposit
box numbers (if applicable), and include this list with
the AP-1 report it files with the Division.
- Reporting of Tangible Property. Each
bank or credit union which delivers the contents of safe
deposit boxes to the Division shall prepare a separate AP-1
Form for tangible and intangible property.
- Auctions of Tangible Property.
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(a) All contents of safe deposit boxes delivered
to the Division pursuant to M.G.L.c. 158, § 17,
and M.G.L. c. 171, § 75, and the provisions of
c. 200A, and other tangible property delivered to
the Division, shall be held by the Division for not
less than one year from the date of receipt before
being deemed eligible for auction pursuant to M.G.L.
c. 200A, § 9.
(b) All owners of tangible property whose names and
last-known addresses have been remitted to the Division
shall be sent a due diligence letter from the Division
and shall be listed in the “notice of names of persons
appearing to be owners of abandoned property” published
by the Division pursuant to M.G.L. c. 200A, §
8(a).
(c) All contents of safe deposit boxes which are determined
by the Treasurer to have some commercial value, having
been held by the Division for not less than one year,
and having remained unclaimed following the due diligence
efforts and public advertisement provisions listed
above, shall be deemed eligible for auction by the
Division. Such property shall be appraised and sold
at public auction, at a place and time to be determined
by the Treasurer.
(d) Any tangible property delivered to the Treasurer
pursuant to the provisions of 960 CMR 4.20 for which
a claim form has been issued pursuant to 960 CMR 4.16,
shall be eligible for auction under the provisions
of 960 CMR 4.24 if such property is not returned to
the claimant within one year of the date on which
a claim form was issued for the property. |
- Auction Previews. The Division may hold
as many public previews of the property for sale at any
auction held under the provisions of 960 CMR 4.05(6) as
it deems necessary and desirable and shall be responsible
for the safety and security of all property publicly displayed.
- Ineligibility to Purchase Property at Auction.
(a) The following persons are ineligible to participate
in any public auction of the contents of safe deposit boxes
and other tangible property held by the Division:
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1. any employee of the Division and/or member of
his or her immediate family;
2. any person(s) participating in the supervision
of property displayed at Auction Previews per 960
CMR 4.05(6);
3. any person(s) employed by the Division to appraise
tangible property;
4. any person(s) employed by the Division to conduct
an auction of tangible property. |
- Disposition of Auction Proceeds. All
net proceeds of any auction held under the auspices of M.G.L.
c. 200A, § 9, shall be directly deposited into the
Abandoned Property Trust Fund, in accordance with 960 CMR
4.03(3).
- Disposal of Tangible Property Not Subject to Auction.
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(a) Any tangible property, but especially
paperwork, which has been determined to have insubstantial
commercial value and which has not been selected for
auction shall, subject to the discretion of the Division,
be destroyed no later than six months after any auction
at which the property would have been eligible to
have been included, provided that this action shall
not conflict with the provisions of M.G.L. c. 66,
§ 8.
(b) If any tangible property delivered to the Division
is subject to the provisions of M.G.L. c. 140 regarding
firearms, this property shall be turned over to the
State Police by the Division for disposal or other
disposition in accordance with law. |
- Disposition of Armed Service Medals.
Medals awarded for military service in the armed forces
of the United States shall not be subject to auction under
the provisions of 960 CMR 4.05(5). Rather, the Division
shall contact an appropriate state or federal governmental
veterans agency for assistance in reuniting these medals
with their rightful owners or heirs.
4.06: Procedures for Interaction with Heir Finders
- Registration of Heir Finders. All heir
finders who seek to interact with the Division on behalf
of an owner or holder must register with the Division on
a form prescribed by the Treasurer. Registration information
shall include, but not be limited to, an heir finder’s previous
business experience and whether the heir finder has a previous
criminal record.
- Conflict of Interest. No heir finder
shall be allowed to register with the Division and represent
the interests of owners if this person or entity performs
pre-escheat due diligence work for a holder.
- Posting of Bond. All registered heir
finders must post a performance bond of not less than $10,000
to insure the Division against any fraudulent claims that
may arise as a result of an heir finder’s representation
of an owner or holder.
- Heir Finder Contracts. Pursuant to M.G.L.
c. 200A, § 13, agreements or contracts to pay compensation
to recover or assist in the recovery of abandoned property
between heir finders and owners are unenforceable if made
within 24 months of the date the property was received by
the Division. An original copy of any agreement or contract
between an heir finder and an owner, signed, dated and notarized,
shall be included with the initial filing of any claim pursuant
to 960 CMR 4.04. Handwritten agreements or contracts will
not be accepted.
- Power of Attorney. No Power of Attorney
filed by an heir finder will be recognized by the Division
for the purpose of making a claim pursuant to M.G.L. c.
200A and the provisions of 960 CMR 4.04(2).
- Release of Claim Forms to Owners Represented
by Heir Finders; Payment of Claims.
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(a) No claim form shall be sent to an owner being
represented by an heir finder until and unless the
owner or his/her legal representative has made direct
contact with the Division.
(b) Payment for all claims made to an owner who has
been assisted by an heir finder shall be made only
to the owner and in no instance to the heir finder. |
- Notice to Claimants. A complete claim
filed by an heir finder on behalf of an owner must include
a notarized original copy of a “Notice to Claimant” form,
prescribed by the Treasurer, giving clear indication to
the owner of the statutory limit on heir finder fees expressed
in M.G.L. c. 200A, § 13(b). In no case shall the heir
finder fees or compensation exceed 10% of the amount of
the property originally remitted to the Division.
- Fees for Owner Information. Consistent
with M.G.L. c. 200A, § 13, owner information for each
report year shall be made available to heir finders not
earlier than 24 months after its receipt by the Division.
Owner information shall be reproduced in a format to be
determined by the Treasurer and shall be provided to any
registered heir finder for a fee of $75.00 per report year.
The fee shall be paid in the form of a certified check or
money order and made payable to the Commonwealth of Massachusetts.
All fees for owner information shall be received by the
Division before the owner information is made available
to any heir finder.
4.07: Audit Program
Pursuant to M.G.L. c. 200A, § 12, the Treasurer, his/her
designee or agent may at any reasonable time and upon reasonable
notice examine or audit a holder’s books, papers or other
records to verify proper compliance with the reporting requirements
of M.G.L. c. 200A.
- Period of Limitation. Pursuant to M.G.L.
c. 200A, § 12, the Treasurer may examine the records
of a holder at any time within six years of the date upon
which an annual abandoned property report was due to be
filed with the Division, or the date upon which such report
was received by the Division pursuant to an extension granted
under the provisions of M.G.L. c. 200A, § 13B, whichever
is later. In the case of a holder who has filed abandoned
property reports with the Division as required by law, the
scope of the examination of the holder’s records will be
limited to property that had become reportable during the
six-year period of limitation defined in M.G.L. c. 200A,
§ 12(f). In the case of a holder who fails to file
abandoned property reports with the Division as required
by law, or who files a false, fraudulent or insufficient
report, the six-year period of limitation shall be waived
for purposes of record retention and the conducting of examinations.
- Records Retention. In accordance with
M.G.L. c. 200A, § 12(f), holders are required to maintain
abandoned property records for nine years from the date
of last activity for any property which has been reported
to the Division, or six years from the date such property
is reported to the Division.
- Failure to Maintain Records. In the case
of a holder that has met the annual reporting requirement
of M.G.L. c. 200A, § 7(d), but where the holder does
not meet the records retention requirements of M.G.L. c.
200A, § 12(f), the Treasurer, his designee or his agent
may employ such estimation techniques in the conduct of
an audit as are customary and reasonable in the area of
regulatory compliance and enforcement to fairly and accurately
estimate the liability for property category types that
may not have been reported or fully reported by the holder.
- Audit Process.
(a) Excluding any state-authorized multi-state abandoned
property audit/examination, the Treasurer may conduct either
a “desk audit” or a “field audit” of holder records pursuant
to M.G.L. c. 200A, § 12 and the provisions of 960 CMR
4.07.
(b) A “desk audit” shall consist of the Treasurer, his/her
designee or agent examining the books, papers or other records
of a holder at the office of the Division to determine compliance
with the abandoned property reporting requirements of M.G.L.
c. 200A, § 7. The person authorized to conduct this
audit may request any information necessary to complete
the audit and may require the holder or his/her representative
to appear in person. Performance of a desk audit does not
preclude the Division from the subsequent performance of
any future desk or field audit, provided however, that following
the conclusion of a field audit as defined in paragraph
(c) and upon payment by the holder of any assessments issued
in such audit, or upon payment of any assessments upheld
in an appeal of such audit assessments, the period audited
shall be closed to any future Massachusetts abandoned property
audit in perpetuity.
(c) A “field audit” shall consist of the Treasurer, his/her
designee or agent conducting an examination of the books,
papers or other records of a holder at the holder’s place
of business. The holder shall be notified in advance that
he or she has been selected for audit and shall be instructed
as to the books, papers and other records which should be
made available to complete the audit.
- Audit Procedures.
(a) Excluding any state-authorized multi-state abandoned
property audit/examination, every abandoned property audit
conducted in accordance with M.G.L. c. 200A, § 12,
shall include, but not be limited to, the following audit
procedures:
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1. A Notice of Intent to Audit shall be issued to
the holder. The notice will provide the holder notification
in writing that the Division intends to commence an
examination of the holder’s records pursuant to M.G.L.
c. 200A, § 12, and that the holder will be required
to provide certain records to facilitate the examination.
2. An Opening Meeting will be held. This meeting will
be attended by the holder and/or his representative,
the Treasurer or his/her designee or agent will be
present to discuss how the examination will be conducted.
3. A Field Review will be undertaken, at which holder
records made available for the opening meeting will
be briefly discussed and examined.
4. A Pre-Engagement Analysis will be conducted by
the Division or its agent to determine whether the
examination should be continued or concluded. |
(b) If it is determined by the Director and Assistant Treasurer
that an examination/audit should be continued, the audit
shall be deemed a “field audit.” The field audit will include,
but not be limited to, the following audit procedures:
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1. A Letter of Engagement shall be prepared by the
Treasurer’s agent and, upon approval by the Director
and Assistant Treasurer, shall be sent to the holder
prior to the commencement of the actual examination.
The Letter of Engagement shall inform the holder of
the Treasurer’s intent to commence a “field audit”.
2. The Field Work shall be conducted under Audit Program
Guidelines established by the Director and updated
yearly as needed.
3. A Monthly Progress Report shall be prepared by
the Treasurer’s agent and forwarded to the Director
detailing the status of the examination/audit.
4. A Holder Conference shall be held, at which the
holder and/or his representative shall be afforded
the opportunity to discuss the preliminary results
with the Director and the Treasurer’s agent. At this
time, the holder shall be provided with a 30-day Review
Period in order to perform additional due diligence
or to present documentation to negate the presumption
of abandonment. At the holder’s request, a second
conference may be held prior to the issuance of a
Draft Report.
5. A Draft Report shall be prepared by the Treasurer’s
agent and forwarded to the Director for final review
after all field work is completed.
6. A Final Report to the Division shall then be prepared
by the Treasurer’s agent and forwarded to the Director
who, upon approval, shall transmit the Final Report
to the holder by certified mail. The Final Report
shall detail the results, methodology and objectives
of the audit and shall be accompanied by a Letter
of Demand, which will express to the holder the terms
and conditions under which any findings are to be
reported to the Division, and outline the right of
appeal to the holder should he/she choose to appeal
any findings. |
(c) An audit shall be deemed closed when all property identified
as abandoned property in the Final Report is remitted to
the Division, or all adjustments made by the holder during
the Review Period are confirmed by the Treasurer’s agent
and all remaining properties are remitted to the Division
in the prescribed format.
- Order of Priority of Audits. Excluding
any state-authorized multi-state abandoned property audit/examination,
all audits undertaken pursuant to M.G.L. c. 200A, c. 12,
shall be conducted in the following order of priority, unless
otherwise directed by the Treasurer:
(a) First Priority – holders who have never reported abandoned
property to the Division;
(b) Second Priority – holders who have reported abandoned
property to the Division in a previous year or years, but
who are not currently reporting, or holders whose current
reporting levels appear deficient;
(c) Third Priority – holders who are currently in compliance
with the reporting requirements of M.G.L. c. 200A, §
7.
- Appeals. Appeals of the findings of any
abandoned property audit conducted by or on behalf of the
Treasurer shall be undertaken in accordance with the provisions
of M.G.L. c. 200A, § 12.
4.08: Amnesty.
- Operation of the Amnesty Program. Pursuant
to the statutory authority granted in St. 2000, c. 198,
the Treasurer has established an amnesty program in order
to encourage voluntary compliance with the abandoned property
laws of Massachusetts. The amnesty program will be in effect
for 181 days, commencing on May 6, 2001, and ending on November
3, 2001. The Treasurer will not initiate an investigation
and/or pursue criminal prosecution and will waive all penalties,
fines or interest that may be imposed under M.G.L. c. 200A,
§ 12(e), for holders to whom the Treasurer grants amnesty
and who voluntarily remit abandoned property and otherwise
comply with the requirements of M.G.L. c. 200A and the provisions
of 960 CMR 4.03.
- Eligibility of Holders. The Treasurer
shall grant amnesty to any holder who files a Request for
Amnesty form which is postmarked on or before November 3,
2001, and who meets the following criteria:
(a) The holder is not the subject of an audit or investigation
by the Treasurer or a party to litigation concerning abandoned
property, as of May 6, 2001. The term “subject to an audit
or investigation” shall mean that on or before May 6, 2001,
the Treasurer or his/her agent or designee has sent a Letter
of Engagement to a holder, as described in 960 CMR 4.07(5)(a)1.,
informing the holder of the Treasurer’s intent to commence
a Field Audit.
(b) The property to be reported is in fact abandoned pursuant
to M.G.L. c. 200A, §§ 1A, 2, 3, 4, 5, 5A, 5B,
5C, 6, 6A or 6B and was required to be reported on or before
November 1, 2000, or in the case of life insurance companies,
on or before May 1, 2000.
(c) The abandoned property of the holder is transferred
directly to the Treasurer, his designee or authorized agent
during the amnesty period or the statutorily-authorized
period of extension for filing reports of abandoned property,
as defined in M.G.L. c. 200A, § 13B, whichever is later.
(d) Appropriate reports pertaining to the property are filed
with the Treasurer in a format satisfactory to the Treasurer
during the amnesty period or authorized extension period,
whichever is later. No holder that has filed a Request for
Amnesty form on or before November 3, 2001, and has made
a good faith attempt to report its abandoned property as
described above prior to the expiration of the amnesty period
shall be denied the right to participate in the amnesty
program.
(e) Records pertaining to the abandoned property are maintained
by the holder in compliance with M.G.L. c. 200A, §
12(f) and 960 CMR 4.03(16).
- Types of Abandoned Property Eligible for Amnesty.
The following types of property are eligible for inclusion
in the amnesty program:
(a) all delinquent abandoned property reports and past due
remittances;
(b) all previously under-reported abandoned property.
- Payment in Full. A holder must make
full payment of all abandoned property due on or before
November 3, 2001, or by the last day of an authorized extension
period, whichever is later, in order to qualify for amnesty.
- Verification and Assessment. Any abandoned
property report filed under the amnesty program shall be
subject to assessment and verification as provided by statute.
The Treasurer may review all cases in which amnesty has
been granted and may, on the basis of fact, fraud or misrepresentation,
rescind or permit his/her grant or denial of amnesty, respectively.
Any holder who files a false or fraudulent report or attempts
in any manner to defeat or evade the proper remittance of
abandoned property under the amnesty program shall be subject
to applicable penalties and fines, as defined in M.G.L.
c. 200A, § 12 and 960 CMR 4.03(6).
4.09: Revocation of Prior Policies, Rulings
and Agreements
960 CMR 4.00 supercedes any and all prior policy statements
of the Division, whether internal or external, including but
not limited to letter rulings, directives, technical information
releases and regulations, with the exception of the Division’s
Audit Program Guidelines. All prior statements, letter rulings,
directives, technical information releases and regulations
of the Division, with the exception of the Division’s Audit
Program Guidelines, are hereby revoked in their entirety.
4.10: Severability
If any section or clause of 960 CMR 4.00 is held invalid
or unconstitutional by a court of competent jurisdiction,
the remainder shall not be affected thereby.
REGULATORY AUTHORITY
960 CMR 4.00: M.G.L. c. 200A, § 13A.
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