Texas

At Eisen, we’re committed to helping financial institutions navigate these complexities with confidence and ease. Here’s what you need to know about Texas escheatment laws and how we can help you stay compliant every step of the way.

Texas Escheatment Law Overview

Texas unclaimed property laws are designed to ensure that property owed to individuals doesn’t go unclaimed indefinitely. The Texas Comptroller of Public Accounts oversees the state’s unclaimed property program and enforces escheatment rules.

In general, property is considered abandoned when there has been no owner-initiated activity for a specified period (known as the dormancy period). Once the dormancy period expires, businesses must attempt to locate the rightful owner before remitting the property to the state.

Dormancy Periods in Texas

If the property type doesn’t have any activity from the owner, use the date when the property was supposed to be paid or given to the owner. The dormancy periods in Texas vary depending on the type of property:

Source: https://www.claimittexas.gov/app/dormancy

Quick note: In Texas, the "triggering event" is generally defined as a lack of owner-initiated activity within the dormancy period. Returned mail, unclaimed refunds, or unacknowledged communications can also lead to the presumption of abandonment.

Due Diligence Requirements

Before reporting unclaimed property to the state, Texas law requires holders to perform due diligence to try and reunite owners with their assets.

At least 60 days prior to filing, you must send a written notice to the owner’s last known address if the property is valued at $250 or more. This notice must inform them that their property is at risk of being transferred to the Texas Comptroller if no action is taken.

This step is critical, not only to fulfill legal obligations, but to maintain customer trust and demonstrate a commitment to responsible stewardship.

Reporting Requirements and Deadlines

Texas has an escheatment reporting cycle that’s slightly different than most states:

• Report Period: March 2 through March 1 each year
• Filing Deadline: Before July 1 each year

Businesses must submit their reports electronically if they are reporting 10 or more properties. Along with the report, holders must remit the unclaimed funds or property to the Texas Comptroller.

Late reporting can result in penalties and interest charges, so timely compliance is crucial.

Penalties for Non-Compliance

Failure to comply with Texas escheatment laws can lead to:

• Interest: A 10% annual interest rate, calculated from the date the property should have been paid or delivered until the date it is actually paid or delivered.
• Penalties: A 5% penalty if a holder fails to pay or deliver property on time. An additional 5% penalty is added if the property remains unpaid or undelivered for more than 31 days past the due date.
• Audits: Audits can be time-consuming and costly, spanning multiple years.

Staying proactive and organized helps avoid these risks and ensures that your institution remains in good standing.

How Eisen Helps You Stay Compliant in Texas

Navigating Texas escheatment laws can be complex, but it doesn’t have to be overwhelming. At Eisen, we simplify the process through our purpose-built platform:

• Escheatment Manager: Automate your unclaimed property reporting with ease. Eisen’s Escheatment Manager streamlines identification, due diligence, and reporting, significantly reducing manual efforts and ensuring accurate, timely submissions.
• Disbursement Manager: Facilitate efficient remittance of unclaimed property to the Texas Comptroller. Our Disbursement Manager simplifies payments and transfers, helping you minimize compliance risks and meet deadlines with confidence.
• Outreach Manager: Enhance your due diligence process with the Outreach Manager. Engage owners through automated communications, increasing the likelihood of reuniting them with their property and strengthening customer trust.

Compliance isn’t just about checking a box. It’s about protecting your institution, preserving customer trust, and creating measurable impact. With Eisen as your partner, you can approach escheatment with clarity and assurance.