Reed Smith Client Alerts

Effective March 23, holders of abandoned property for New York owners will have an obligation to “confirm” whether an owner is deceased in some instances. The new regulation does not require holders to perform periodic searches across all accounts, but holders receiving a “notice or indication of death” have 90 days to confirm whether the owner is deceased. Neither the applicable types of “notice” necessary to trigger the search requirement, nor the manner in which the owner’s death is to be “confirmed”, are specified by the regulation.

Authors: Michael Rato

Many holders may elect to use the Social Security Administration’s Death Master File (DMF) to perform these confirmations. Unfortunately, the accuracy of the DMF has been called into question in recent years.1 The regulation does not explicitly provide any protection for holders who erroneously report property as “abandoned” based upon inaccurate information in the DMF.

Compounding this uncertainty, the impact of a confirmed owner death on the dormancy period may be problematic in some circumstances. The Regulatory Impact Statement submitted during the proposed rule’s comment period provided that "[u]pon confirmation of death, the dormancy period will start to run." Accordingly, holders that confirmed owner death would likely have had several years before having to report and remit the funds to the NY Office of Unclaimed Funds (OUF) in order to locate beneficiaries.