Year-end Delaware unclaimed property update

Holders of unclaimed property should be familiar with the adage: the only constant is change. Across the 50 states and a few additional jurisdictions, annual unclaimed property compliance obligations come with unique laws, reporting requirements and ever-changing regulatory schemes. Among these, Delaware stands out as one of the most active and notable states. Despite its small geographic size, Delaware’s significance in the unclaimed property landscape is unmatched due to its high concentration of incorporated businesses and active enforcement policies. The following is an overview of recent updates and changes in Delaware’s unclaimed property administration.

Delaware’s Voluntary Disclosure Agreement program

On Nov. 15, 2024, Delaware issued invitations for its unclaimed property Voluntary Disclosure Agreement (VDA) program. These notices were sent to several hundred companies at a time, providing a 90-day window to respond and enroll in the program. The critical takeaway is that holders that choose not to participate should anticipate an audit notice will follow once the 90-day period lapses.

Unclaimed property audits are far from trivial—they can be lengthy, intrusive and resource-intensive. Businesses receiving a notice should carefully evaluate their options and consult with an unclaimed property specialist to fully understand the implications of participating in the VDA program versus opting out.

Verified report notices

In our article, Delaware unclaimed property enforcement continues in fiscal year 2025, we highlighted that Delaware began issuing additional verified report notices. Verified report notices are issued to companies that either filed 2023 Delaware unclaimed property reports or, in some cases, have not previously filed unclaimed property reports. These notices are meant to confirm compliance with the Delaware compliance requirements and recipients must respond within 30 days or risk further action.

The letters are often addressed to executives such as the Chief Financial Officer, Controller, or Tax Vice President and, if missed, can result in deeper scrutiny or even trigger an audit. Additional notices are expected to be sent out in the coming year. Businesses should be vigilant and ensure these notices are promptly reviewed and addressed to avoid non-compliance repercussions.

Legislative action: Senate Bill 267

In August, Delaware Gov. John Carney signed Senate Bill 267, introducing important updates and clarifications to the state’s unclaimed property statutes.

One significant provision of the bill included Delaware’s alignment with the Revised Uniform Unclaimed Property Act of 2016. Specifically, Delaware will no longer claim properties with foreign (non-U.S.) addresses if the foreign jurisdiction either requires escheatment of the property or exempts it from reporting. This amendment could prove critical during audits or VDAs, as it may allow businesses to exclude certain foreign-addressed properties from Delaware’s scope of review.

Senate Bill 267 also includes updates to:

• Reporting requirements for securities
• Refund processes for overreporting
• Provisions for holders in bankruptcy
• Indemnification levels for holders

Businesses domiciled in Delaware—or those filing unclaimed property reports in the state—should thoroughly review these changes and assess their impact on reporting obligations.

The MoneyGram case settlement

After over eight years of litigation, Delaware settled with other states involved in the U.S. Supreme Court consolidated cases, Delaware v. Pennsylvania and Wisconsin and Arkansas, et al. v. Delaware, regarding MoneyGram’s unclaimed property reporting. In 2023, the court ruled against Delaware on the merits, leaving damages to be determined. As part of the settlement:

• Delaware will pay over $100 million to participating states for improperly reported MoneyGram financial instruments
• Delaware relinquished its claim to tens of millions of dollars held in escrow during the case

The court ultimately determined that the Disposition of Abandoned Money Orders and Traveler’s Checks Act of 1974 governs where certain properties should be reported. While this decision sets a precedent, it applies to a specific set of financial instruments, leaving room for future interpretation by other courts.

Takeaways

With the unclaimed property landscape continually evolving, businesses must stay proactive to ensure compliance and mitigate risks. RSM US LLP recommends that companies establish policies and procedures to identify, track and report unclaimed property effectively, and engage with an unclaimed property specialist to address compliance gaps or potential liabilities, especially for businesses that have never filed reports or only report limited property types.

For more information about RSM’s unclaimed property services or further insights, visit the RSM Unclaimed Property page.