The Escheat Process
Track dormancy to document triggers for abandoned property
Send required communication to unclaimed property owners
Advance unclaimed property status based on applicable laws
File notifications and reports to relevant government regulators
TYPES OF UNCLAIMED PROPERTY
- Lease Bonuses
- Mineral Interest Royalty Payments
- Working Interest Production Payments
- Overriding Royalties
- Delay Rentals
- Shut-In Payments
- Unpaid Wages or Commissions
- Unreimbursed Expenses
- AR Balances
- AR Credit Memos
- Unidentified Remittances
- Unresolved AP Balances
SUSPENSE MANAGEMENT
Commonly Escheated Suspense
- Bad Address
- Deceased / Probate
- Unknown Owners
- No Social Security Number
- Unsigned Division Order
Historically Excluded Suspense
- Title Requirement / Title Dispute
- Litigation
- Deceased / Probate
ESCHEAT PRIORITY RULES
- First Priority Rule: The TX v. NJ case established the first priority for remitting unclaimed property to the state of the owner’s last known address.
- Second Priority Rule: In the absence of the unclaimed property owner's last known residence, the property should be escheated to the holder's state of incorporation.
- Exception: If the owner's last known address is in a location or country that does not have an applicable escheat law, unclaimed property reverts to the state where holder is incorporated.
DORMANCY & DUE DILIGENCE
- Each jurisdiction varies, but typically you must send notices to owners no more than 180 days and not less than 60 days before filing deadline
- Spring dormancy cut-off typically December 31st
- Summer dormancy cut-off: March 1 (Texas), March 31 (Michigan)
- Fall dormancy cut-off typically June 30th
Annual Filling Deadlines
*Mineral Proceeds Exempt
RULE CHANGES & TRENDS TO TRACK
- RUUPA: Latest changes add 2 new types of owner activity that show interest in property/exempt from reporting (e-mail and bank withdrawal/deposit)
- NAUPA III: New standard available in the second half of 2024 but likely to see uneven adoption
- DOD: Growing use of date of death will bring change to more state filing rules
- Audits: Increasing activity in Texas, Delaware, Arkansas + more
HOW PAKENERGY HELPS
- The only energy industry specific unclaimed property management solution
- Continuously refreshes with latest dormancy rule changes and filing deadlines
- Tracks owner activity and automates due diligence letters
- Automatically generates state-specific EDI data files for painless filing
DISCLAIMER: The information provided in this document does not, and is not intended to, constitute legal advice; instead, all information, content, and materials included in this presentation are for informational purposes only. Information contained may not constitute the most up-to-date legal or other information.
Ready to modernize and streamline your Unclaimed Property management operations with The Pak? Get a demo and see how PakEnergy’s purpose-built tech tackles each step in the escheat process, from tracking owners and due diligence to untangling complex dormancy and filing rules. Schedule your demo today!
