Michigan Abandoned Property Law: Reporting, Penalties, and Disclosure

Michigan’s abandoned property law, the Uniform Unclaimed Property Act (Public Act 29 of 1995), requires every business, organization, and government entity holding dormant assets belonging to someone else to try to reach the owner, then report and turn the property over to the Michigan Department of Treasury each year. Ignoring it triggers interest at 1% per month plus civil penalties that climb to $25,000 and a 25% surcharge when the failure is willful.

What Property Is Covered and When It Becomes Reportable

The statute reaches broadly. Bank accounts, uncashed payroll and vendor checks, insurance proceeds, utility deposits, stocks, dividends, gift cards, and the contents of safe deposit boxes all fall within it once they’ve sat untouched long enough.¹

Dormancy periods differ by property type. Uncashed payroll checks become reportable after one year of inactivity. Most other property, including vendor checks and credit balances, becomes reportable after three years. Government entities operate on a one-year rule for everything they hold.¹

Gift Cards and Credit Memos

A gift certificate issued for retail goods or services by someone engaged in retail sales is completely exempt from the Act. Gift cards and credit memos that don’t qualify for that retail exemption are presumed abandoned after three years of inactivity, measured from the date the card or memo first became usable. A partial redemption restarts the three-year clock from the date of that last transaction.²

Owner Notice Before You Report

You can’t just hand the property to the state. Michigan requires holders to send a written notice to the apparent owner’s last known address between 60 and 365 days before the annual report deadline. The obligation kicks in only when all three of these are true: you have an address on file that your records don’t already show as bad, the owner’s claim isn’t barred by the statute of limitations, and the property is worth $50 or more.³

High-volume filers get a slightly higher threshold. If your annual report will include at least 25,000 individual properties each worth over $50, the notice requirement applies only to properties valued at $100 or more.³

The notice itself must contain three elements: a statement that you’re holding property the addressee appears to own; your name and address, including any recent name changes; and a statement that the property will be turned over to the state administrator if the owner doesn’t respond.³ Keep copies. Those records are your best evidence of compliance if questions arise later.

The July Report and Delivery

The annual unclaimed property report is due on the first business day of July and covers all property that reached its dormancy period as of the preceding March 31.⁴ You file with Michigan if the owner’s last known address is in Michigan. If you’re incorporated in Michigan and the owner’s address is unknown, Michigan also gets the report.⁵

The report must be verified and, for each property valued at $50 or more, include:

The owner’s name and last known address (except for traveler’s checks and money orders).
For unclaimed life insurance or annuity proceeds of $50 or more, the full name and last known address of both the insured or annuitant and the beneficiary.
For safe deposit box contents or other physical items, a description, where they’re stored, and any amounts owed to the holder.
The nature and identifying number of each asset and the amount due. Items under $50 can be reported in the aggregate.
The date the property became payable and the date of the last owner transaction.

These elements come from the statute’s requirements for annual filings.⁶ If your organization is a successor to a prior holder, or your entity has changed names, disclose all former names and addresses of prior holders.

You turn the property itself over with the report. Extensions are available on request. Contact the Department of Treasury’s reporting team before the July deadline with your company name, holder ID, federal tax ID, and the reason for the extension.⁵

Penalties for Missing or Botching the Report

Michigan’s penalty structure escalates based on whether the failure was accidental or intentional, and the gap between the two is substantial.

Standard Violations

A holder who fails to report, pay, or deliver property on time owes interest to the administrator at 1% per month on the value of the property, running from the date it should have been turned over. On top of that, a civil penalty of $100 per day applies for each day the report or delivery is late, up to a maximum of $5,000.⁶

Willful Violations

When the failure is willful, the numbers jump. The civil penalty rises to $1,000 per day, up to $25,000, plus 25% of the total value of any property that should have been reported or delivered. Filing a fraudulent report carries the same $1,000-per-day penalty, also capped at $25,000, plus the 25% surcharge.⁶

The administrator can waive interest and penalties, in whole or in part, when a holder shows good cause. Thorough records of due diligence efforts and reporting attempts matter here. Showing that you tried to comply and fell short due to honest mistakes puts you in a stronger position than having no documentation at all.

If You’re Already Behind: Voluntary Disclosure

Michigan can audit holders to verify compliance, and these audits are often run by third-party firms on behalf of the state. If your organization has never reported unclaimed property or has underreported in past years, the Department of Treasury offers a Voluntary Disclosure Agreement. Under a VDA, the holder agrees to identify and remit previously unreported property in exchange for more favorable terms than a full audit would produce.⁴ Approaching the state before the state approaches you almost always leads to a better outcome. VDA forms are available through the Department of Treasury’s holder resources page.

What Happens After the State Takes Custody

Once the Treasury receives the property, the state becomes its custodian rather than its owner. The property remains claimable by the rightful owner or their heirs in perpetuity, with no filing deadline.⁷ The state maintains a searchable database at unclaimedproperty.michigan.gov where anyone can check whether Michigan is holding assets in their name.⁸

The state can liquidate assets like stocks or other securities to prevent loss of value, holding the proceeds for the owner. If the administrator determines that delivered property has virtually no commercial value, the state may destroy or dispose of it. Neither the state nor the original holder faces liability for property disposed of under that authority.⁹

Owners who file a claim receive either the original property or, if the state has already sold it, the net proceeds. For property that was earning interest on the date the holder surrendered it, the state pays interest at 6% per year, or whatever lower rate the property actually earned while the holder had it. That interest accrues from the date of delivery to the state and stops at the earlier of ten years or the date of payment. The administrator must review each claim within 90 days and send written notice if it’s denied in whole or in part.¹⁰

1
Michigan Unclaimed Property. About Michigan Unclaimed Property
2
Michigan Legislature. Michigan Code 567.235 – Gift Certificates, Gift Cards, Credit Memos
3
Michigan Legislature. Michigan Code 567.238 – Report of Presumed Abandoned Property
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Michigan Unclaimed Property. Reporting Guidelines
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Michigan Unclaimed Property. Reporting Property
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Michigan Legislature. Michigan Code – Uniform Unclaimed Property Act
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Michigan Unclaimed Property. FAQs
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Michigan Unclaimed Property. Michigan Unclaimed Property
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Michigan Legislature. Michigan Code 567.249 – Determination of Insubstantial Commercial Value
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Michigan Legislature. Michigan Code 567.245 – Claim of Interest in Property