Introduction
Statutes of limitation (“SOL”) have long served as a structural constraint on a state’s authority to enforce its unclaimed property law—defining the temporal boundaries of audit exposure and establishing a predictable endpoint for holders. That constraint is now under pressure. Across multiple jurisdictions, legislatures and courts are reevaluating how SOLs apply to unclaimed property audits and the states’ abilities to enforce resulting findings, with proposals and decisions that effectively suspend, toll, or recharacterize those periods in ways that dilute their practical force. The result creates a compliance environment in which the concept of “closed years” is increasingly uncertain, and risks for holders correspondingly expanded. This article examines those developments and their implications for finality, record retention, and data governance in modern unclaimed property enforcement.
SOLs, Generally
A statute of limitation (“SOL”) limits the amount of time a party has to initiate a certain legal action. SOLs are animated by three important public policy considerations. First, an SOL protects the defendant’s opportunity to defend against a legal action by making sure the legal action takes place within a reasonable period of time.1 Second, an SOL relieves courts from hearing “stale” claims, which may involve facts and evidence long forgotten or lost.2 Finally, SOLs protect potential defendants from a protracted fear of litigation.3
In unclaimed property enforcement, an SOL limits the state’s right to enforce the duty to report and remit unclaimed property and prevents courts from hearing stale claims concerning debts that purportedly arose more than a decade before the state initiated the action. The SOL also enables companies to provide more detailed records and knowledgeable witnesses, consistent with the state’s “interest in its courts not being burdened with old claims” and its “interest in the efficient and fair administration of justice when cases are prosecuted on fresh evidence.”4 Additionally, effective SOLs encourage more frequent reviews, increasing the state’s likelihood of taking custody of recently aged property and, thus, improving chances of success in reuniting owners with their property.
For these reasons, most state unclaimed property acts include an SOL. Although the language may vary, there are commonalities among the SOL provisions in many states. In fact, several states have adopted limitations provisions that are either identical – or nearly identical – to the Uniform Law Commission’s proposed language in the Revised Uniform Unclaimed Property Act (“RUUPA”). However, recent legislative and judicial developments are threatening to change the stability of those clear limitation provisions. Both developments have practical implications for holders.
Recent developments
Legislative Developments
State legislators throughout the country are proposing legislation to toll the SOL for states to enforce their unclaimed property laws. Arizona and Nebraska are two states in which such bills were recently proposed. We discuss each proposal in turn.
- Arizona SB 1430
On January 27, 2026, an Arizona legislator introduced in the Arizona Senate SB 1430 (the “Arizona Bill”). The Arizona Bill – styled as the Tax Corrections Act of 2026 – would have tolled the SOL for the Arizona Department of Revenue (the “Arizona Department”) to enforce Arizona’s unclaimed property laws. Under current law, the Arizona Department is generally precluded from initiating an action or proceeding to enforce its unclaimed property law for property more than four years after the holder either identified the property in a report filed with the Arizona Department or gave express notice to the Arizona Department of a dispute regarding the property. A.R.S. § 44-321(C). The Arizona Bill sought to toll the SOL “if the holder is expressly notified by the Department that the holder is under audit.” Ariz. SB 1430 (2026). However, on March 4, 2026, the Arizona legislature struck the SOL provision from the Arizona Bill.
- Nebraska LB 1074
Similar to Arizona, a Nebraska legislator introduced in the Nebraska Legislature LB 1074 (the “Nebraska Bill”) on January 15, 2026. The Nebraska Bill would toll the SOL during unclaimed property examinations or voluntary disclosure programs. Under current law, the Nebraska State Treasurer (the “Nebraska Treasurer”) is generally precluded from initiating actions or proceedings to enforce its unclaimed property laws on holders more than seven years after the holder files with the Nebraska Treasurer a report for the period in which the holder’s duty arose.5 The Nebraska Bill would toll the SOL “by the delivery of a notice by the [Nebraska] Treasurer that a holder is subject to an examination” under Nebraska’s unclaimed property law “or the written election by the holder to enter into a voluntary disclosure agreement, whichever occurs first.” Neb. LB 1074 (2026). The tolling period would end once the examination is complete. As a result, property would only become time-barred after any potential examination had been completed, and not a set amount of time after the holder was required to report that property. This would strip holders of any predictability regarding when the possibility of an enforcement action related to a given property would terminate, incentivizing companies to retain records indefinitely despite compelling business and legal reasons to do otherwise. As of this writing, the Nebraska Bill remains pending, having been placed on general file in the Nebraska Legislature on February 19, 2026.
Judicial Developments
- Michigan Supreme Court – Dine Brands Global and The Walt Disney Company
The Michigan Supreme Court recently considered two companion appeals filed by two holders, Dine Brands Global (“Dine Brands”) and The Walt Disney Company (“Disney”),6 against the Treasurer for the State of Michigan (The “Michigan Treasurer”). These appeals concerned unclaimed property examinations the Michigan Treasurer initiated against each holder in 2013 through which the Michigan Treasurer sought records as far back as 2002.7 These audits did not conclude until 2021, when the Michigan Treasurer issued notice of examination determinations (the “Notices”) seeking amounts in excess of $750,000 collectively from the two holders.8
The holders instituted an action in the Sixth Judicial Circuit Court of Michigan, Oakland County (“Michigan Circuit Court”) seeking declaratory judgment and an injunction to prevent the Michigan Treasurer from enforcing the Notices on the ground that the audit findings included years for which Michigan law barred enforcement.9 To support their argument, the holders relied on MCL 567.250(2) which – similar to RUUPA – stated that “an action or proceeding shall not be commended by the administrator with respect to any duty of a holder under … [Michigan’s unclaimed property law] more than 10 years … after the duty arose.”10 Dine Brands and Disney argued that the Michigan Treasurer’s audit was not “an action or proceeding” that would toll Michigan’s SOL. Thus, the holders argued that the Michigan Treasurer was barred from enforcing the Notice for years prior to the SOL.11
Michigan Circuit Court ruled in favor of the holders and the Michigan Court of Appeals affirmed.12 Upon considering the Michigan Treasurer’s appeal, the Michigan Supreme Court remanded the case back to the Court of Appeals with instructions to consider the following:13
assuming that an examination is a ‘proceeding’ for purposes of MCL 567.250(2): (1) whether the commencement of the examination tolled the statute of limitations in MCL 567.250(2); and (2) whether the Treasurer must still file a lawsuit within the applicable time frame to avoid the lawsuit being time-barred.
On November 9, 2023, the Michigan Court of Appeals issued an advisory opinion holding that – assuming an audit is an “action or proceeding” the state need not file a lawsuit to enforce unclaimed property liabilities within the SOL.14
The case returned to the Michigan Supreme Court which issued its decision on March 24, 2025.15 In that decision, the Court held that an examination is not an “action or proceeding” and that it does not toll the SOL. However, the Court left unanswered the question of whether a determination could create a “separate postexamination duty” that would reopen the limitations period.16
The most recent Court of Appeals decision in this case appears to answer this question by allowing the state to demand property that was reportable in years already closed, simply by issuing a Notice and in doing so creating a new duty with which the holder must comply, effectively eliminating the SOL and defeating its underlying public policy considerations.17
Under a subsequent SOL initiated with the issuance of a Notice, the duty to report and remit the property covered by the Notice is essentially revived. Like the legislative proposals discussed above, it places control over closure squarely within the discretion of the state administrator or, as detailed below, its third-party private auditor. Allowing the states to reanimate old years weighs against the policy goals of certainty, finality, and efficiency, underpinning any SOL.
Policy implications of these developments could have dire consequences for holders
Effectively unlimited SOLs deny holders finality
By creating a “new duty,” the Michigan Supreme Court in Dine Brands, as well as the Nebraska legislature, would effectively allow states to take enforcement action with respect to properties that would otherwise be time barred. As a result, companies could receive demands from a state related to property issued 20 or more years prior, simply because the state had begun an examination within the ten years following such issuance. Without appropriate finality as to what property is subject to further action from the state after the date of the Notice, companies will be subjected to the never-ending threat of litigation. Limiting the scope of a post-examination enforcement action to property for which the state is not yet barred from enforcing the holder’s reporting obligation, on the other hand, would provide companies with finality, which is an important principle animating the SOL.18
If states are permitted to include property previously time barred within the scope of the duty created by a Notice it would perpetuate, as a practical matter, open-ended examinations that could go on for decades with no time constraints. Even once an examination began, companies would be afforded no certainty as to how long the examination would endure, how long the company would have to maintain records, and how long the company would be expected to defend aging property. As time goes on and property becomes older, inevitable changes occur: witnesses’ memories fade, employees retire, customers move, and vendors go out of business.
An unlimited SOL raises serious data privacy concerns
One of the primary risks created by an unlimited SOL is the corresponding burden of maintaining adequate records with which a company may defend itself. Companies could be faced with the choice of either maintaining records for potentially over 20 years or retaining records for a shorter amount of time and dealing with the consequences of not being able to defend against unclaimed property assessments. Moreover, this pressure to retain data indefinitely causes real risk because unclaimed property audits routinely cover amounts potentially owed to employees, patients, or bank account holders.19 For some companies, such as those in the financial services or healthcare sectors, this may include even more sensitive information, such as social security numbers.
Under these circumstances, there would be no time before or during an examination when companies would be permitted to destroy records related to any accounting transaction, whether or not it represented aged property. As described below, state auditors have incentives to challenge any record related to a transaction and then require documentary evidence that it is not reportable. The longer holders are required to hold personally identifiable information, the greater the risk that the records are accessed by unauthorized persons. The costs associated with data breaches and record retention impose an unfair burden on all companies.20
Issues with unlimited SOLs are aggravated by states’ use of third-party auditors
Many states use third-party auditors to conduct unclaimed property examinations. The use of a third-party auditor to conduct an unclaimed property examination is not necessarily problematic when the auditor is properly supervised.21 However, the lack of oversight over third-party audit firms, and the fact that these firms are often compensated on a contingent-fee basis, creates incentives to extend audits, expand requests for data, and otherwise exceed the scope of state-mandated authority.22 As a result, many unclaimed property audits have ballooned to capture decades-worth of highly sensitive information, with little to no guidance, standards, or intervention from the states.
During the course of the examination, the third-party auditor effectively decides what documents the company must produce, what entities to examine, what documentation to accept, and how much liability the company owes to the state. The state is typically not even copied on correspondence between the third-party auditor and the company during the examination. This discretion is significant because in many audits most of the purported unclaimed property “found” by the auditor does not represent clear liabilities, but rather cancelled transactions (like voided checks) where the company is unable to sufficiently prove to the auditor’s satisfaction that the item no longer represents an outstanding debt. Holders are often hindered from proving that these cancelled items do not represent real liabilities due to the loss of documentary evidence during a long examination.
The breadth and nature of records requested by third-party auditors poses a significant challenge for companies both in terms of document production in the audit context and for record retention purposes. Moreover, the demands are typically so extensive that it is hard to characterize them as anything other than fishing expeditions; for example, in one examination a third-party auditor demanded that an insurance company “provide a complete download of all individual and group life insurance policies and annuity contracts” that the insurer issued for a period spanning nearly thirty years.23 Such broad demands take more time to process and analyze, increase the costs of the audits on companies, and significantly delay the resolution of an examination.24
Finally, auditors typically will “schedule” almost any amount that appears in a company’s records and then require the company to prove a negative—that the amount is not unclaimed property, even if those same records reflect the transaction as cancelled or reversed. Thus, to adequately defend against an unclaimed property audit, companies need to retain detailed information such as payee names and addresses for extended periods of time.
Conclusion
SOLs exist to promote finality, fairness, and administrative efficiency. In the unclaimed property context, they serve an especially important function: defining the outer boundary of the State’s enforcement authority and allowing holders to align record retention, compliance programs, and risk management practices accordingly.
Recent legislative proposals in states such as Arizona and Nebraska, together with judicial developments in states like Michigan, threaten to erode that boundary. By tolling limitations periods by unilaterally issuing an audit notice—or by permitting enforcement to proceed long after the reporting duty would otherwise be time-barred—these developments convert SOLs from substantive protections into empty formalities. The practical effect is to expose holders to potentially perpetual audit risk, subject entirely to the state’s discretion to initiate and complete an examination. Holders should prepare for a compliance environment in which the concept of “closed years” may no longer provide the certainty it once did.
1. Bigelow v. Walraven, 221 N.W.2d 328, 333 (Mich. 1974) (internal quotations omitted) (holding that a SOL is intended to “compel the exercise of a right of action within a reasonable time so that the opposing party has a fair opportunity to defend.”); see also Turner v Mercy Hosps. & Health Servs., 533 N.W.2d 365, 367 (Mich. Ct. App. 1995).
2. Bigelow, 221 N.W.2d at 333 (holding that SOLs “relieve a court system from dealing with ‘stale’ claims, where the facts in dispute occurred so long ago that evidence was either forgotten or manufactured.”)
3. Id.
4. Howard Univ. v Borders, 588 F. Supp. 3d 457, 472 (S.D.N.Y. 2022).
5. See R.R.S. Neb. § 69-1315(b).
6. Dine Brands Global, Inc. v. Eubanks, Nos. 165391–92, 2025 WL 898837 (Mich. Mar. 24, 2025).
7. Id. at *4.
8. Id.
9. Id.
10. Id. at *5.
11. Id.
12. Id. at *5–*6.
13. Id. at *6.
14. Id.
15. Id. at *16.
16. Id. at *15.
17. Walt Disney Co. v. Eubanks, Nos. 360291 and 360293, 2025 WL 2393837, at *7 (Mich. Ct. App. Aug. 18, 2025).
18. Mitan v Campbell, 706 N.W.2d 420 (Mich. 2005).
19. See IBM, Cost of a Data Breach Report at 6 (2025) (explaining that as of 2025 the global average cost of a data breach is approximately $4.4 million).
20. See id.
21. See U.S. Chamber of Commerce Institute for Legal Reform, Unclaimed Property: Best Practices for State Administrators and the Use of Private Audit Firms at 10 (“Chamber Report”) (“[P]rivate auditors, if appropriately incentivized and supervised, can serve a useful role …”).
22. See Chamber Report at 10 (“[T]he existing model of private auditor arrangements based on contingency fees, undisclosed contracts, opaque selection processes, and inadequate oversight creates an intolerable risk of abuse.”)
23. See Fid. & Guar. Life Ins. Co. v Frerichs, No. 17-3050, 2017 U.S. Dist. LEXIS 181851 at *12–13 (C.D. Ill. Sept. 1, 2017).
24. See Plains All Am. Pipeline L.P. v Cook, 866 F.3d 534, 541 (3d Cir. 2017) (“[T]he average Kelmar audit can be quite burdensome, costing over one million dollars and spanning three to eight years.”).
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