Complex and contradictory, Florida HB 989 passed both houses of the legislature and moved to enrollment on the last day of the legislative session, after a flurry of last-minute amendments unrelated to its unclaimed property provisions. Florida’s governor, Ron DeSantis, will have until March 23rd to sign the bill into law. As stated in the act, it would then become effective upon enactment.
There are numerous implications for unclaimed property contained in this bill. Most significantly are its elimination of the return mail requirement for securities enrolled in dividend reinvestment plans; and its use of death as a dormancy trigger. The death trigger in this bill is presented as both a specific trigger for securities, and as a separate trigger across all property types.
Current Florida law provides that equity securities are presumed unclaimed 3 years after the earlier of (a) an unclaimed distribution (dividend, stock split, etc.); and (b) the date mail was returned as undeliverable. Since dividend reinvestment accounts will typically not have unclaimed distributions, this de facto provides for a return mail dormancy trigger for those securities. This is commonly referred to as an “RPO” standard due to the postal abbreviation for “Return Post Office” typically provided by the postal service on returned items.
This bill would change the dormancy period for securities to be 3 years after the earliest of (a) the last owner-initiated contact, or (b) the date of death of the owner as evidenced by a list of potential indications. However, it goes on to provide that the dormancy period is reduced to one year from the date that notice of the owner’s death is provided if such notice is provided LESS THAN 2 years from the date of death.
This provision dramatically accelerates dormancy due to the owner’s death, and does not provide a mechanism for holders to avoid having property appear past due if they are unaware of an owner’s death until more than two years after the owner’s death. This two year threshold period is of particular consequence in Florida where the probate code provides that any estate, regardless of value, may take advantage of its summary administration proceeding, including the inability of creditors to present a claim, if the petition is filed more than two years after the decedent’s death.
The same two year period is again called upon in the bill’s generally applicable dormancy upon death provision. Added to the bill as an amendment effective February 29, 2024, this provision is included in the section of the law that includes the dormancy catchall as well as adds an overarching provision defining owner initiated contact. The language added to this section in the February 29th amendment provides:
If a holder learns or receives confirmation of an apparent owner’s death, the property is presumed unclaimed 2 years after the date of death, unless a fiduciary appointed to represent the estate of the apparent owner has made an expression of interest in the property before the expiration of the 2-year period. This subsection may not be construed to extend the otherwise applicable dormancy period prescribed by this chapter.
Fla. Stat. § 717.102 (4)
Not only does this provision apply to property types where it would be inappropriate; such money orders, traveler’s checks, and bearer instruments like gift cards, where the holder would have no reason to know of the owner’s death; but it also contradicts other sections of the law such as the revised securities provision included within the very same bill.
Additionally, the language of the generally applicable dormancy upon death provision ignores the fact that an account may have a named beneficiary entitled to contact the holder, that the estate may not require appointment of a fiduciary, or that it could take longer than two years for a fiduciary to be appointed.
In addition to these provisions, the bill includes within the general owner-initiated contact provision language modeled on the Revised Uniform Unclaimed Property Act of 2016 (RUUPA) which has proved problematic for other states that have used it. Specifically, it includes the provision that an automatically recurring ACH does not constitute owner-initiated contact for a deposit account. As a policy matter, the reason for excluding automatic and unmonitored account activity is understandable. But, as a practical matter, since these types of recurring deposits or withdrawals are contracted between the account owner and a third party, the bank does not know if any given ACH is automatically recurring at the time it is made. Thus, banks will have to treat all ACH activity as if it could be automatically recurring, resulting in a scenario where almost all transactions within an account must be ignored for purposes of determining the owner’s interest in the account.
In addition, this bill adds or revises several definitions, adds provisions requiring the escheatment of virtual currency including requiring it to be sold prior to remittance, strengthens protections to holders for good faith compliance with the statute, provides that the state may refund erroneously reported and remitted property within 5 years, adds a provision tolling the statute of limitations upon receipt of an audit notice, restates audit authority, and increases the record retention period to 10 years.