The text of the rule, however, provides that upon confirmation of the owner's death by the holder, the dormancy period will be deemed to "commence on the date of death" -- not the date upon which the holder receives notice, nor the date that the holder confirms the death. While this discrepancy may not be significant where the holder receives notice of an owner's death promptly, there could be situations where notice may be delayed for months or even years. For example, if a holder does not receive notice of an owner death for several years (e.g., after the dormancy period expires, as measured from the date of death) there is the possibility that an item would be deemed "late" even though the holder only recently received notice of the death.

It is unclear whether the regulation will be amended to correct this discrepancy, or if the Office of the State Comptroller will issue guidance. In the interim, however, holders may want to carefully assess the credibility of the source of their “notice” that an owner is deceased, and make outreach attempts relating to the property in lieu of simply relying on the DMF to trigger dormancy. In addition, given that the New York APL provides that interest “shall” be assessed when reported late, holders who are reporting property that appears to be late because of a late death notice are best advised to seek a waiver of interest from the OUF.

1. Levin MA, Lin HM, Prabhakar G, McCormick PJ, Egorova NN. Alive or dead: Validity of the Social Security Administration Death Master File after 2011. Health Serv Res. 2019 Feb;54(1):24-33. doi: 10.1111/1475-6773.13069. Epub 2018 Dec 5. Erratum in: Health Serv Res. 2019 Jun;54(3):722. PMID: 30520023; PMCID: PMC6338290.

Client Alert 2023-082