Michigan Escheatment Laws, Reporting, and Penalties

Michigan’s escheatment laws, codified in the Uniform Unclaimed Property Act at MCL 567.221 and following, require banks, employers, insurers, and other businesses to turn dormant assets over to the Michigan Department of Treasury after a set waiting period, and they let the original owner reclaim that property from the state at any time with no deadline. The default dormancy period is three years, though wages, utility deposits, and government-held property become reportable after one. If you are a business trying to stay compliant, the annual report is due the first business day of July. If you are an individual searching for lost money, the state’s database is free to search and there is no statute of limitations on your claim.¹

When Property Becomes Abandoned

Property is presumed abandoned once the owner has had no contact with the holder for the applicable dormancy period. The clock generally runs from the last sign of owner interest, not from when the account was opened. Logging into online banking or cashing a dividend check resets it.¹

Wages and payroll checks: one year after becoming payable.²
Utility deposits and refunds: one year after service ends.
Government-held property: one year after becoming distributable.
Bank and financial institution accounts: three years of inactivity.
Life insurance and annuity proceeds: three years after maturity or termination.
Stocks and dividends: three years from the last unclaimed distribution or second returned mailing.
Safe deposit box contents: three years after the lease or rental period expires.³
All other property: three years after becoming payable or distributable.

Holder Notice and Reporting Duties

Before turning property over, a holder has to try to reach the owner. For any property worth $50 or more, the holder must mail written notice to the owner’s last known address between 60 and 365 days before filing the annual report, telling the owner that the holder is holding property subject to the act.⁴ This applies only when the records contain an address that hasn’t been flagged as bad.

The annual report is due to the Department of Treasury by the first business day of July and covers property that reached its dormancy period as of the preceding March 31. Written extension requests of up to 60 days are available. Reports must list the owner’s name, last known address, Social Security number if known, a description of the property, the amount, and the date it became payable. Items individually worth less than $50 can be reported in the aggregate.⁴ The department publishes a reporting manual with the required forms and encourages electronic filing.⁵

Most property is remitted along with the report. Safe deposit box contents are different: the holder must wait 120 days after filing before delivering the items, giving the owner one last window. If the owner shows up and proves ownership during those 120 days, the holder returns the contents directly instead of sending them to the state.²

Once property is delivered, the state runs its own notice process. The department mails individual notices for property valued at $50 or more and publishes a list of names in a newspaper in the county of the owner’s last known address. Items under $50 don’t require newspaper publication unless the administrator decides it serves the public interest.²

Penalties for Getting It Wrong

MCL 567.255 imposes escalating penalties based on whether the failure was willful.

Interest on late delivery: any holder who fails to deliver property on time owes 12% annual interest on the value of the undelivered property, running from the date it should have been turned over.²
Willful failure to report: a civil penalty of $100 per day, capped at $5,000, on top of the interest.
Willful failure to deliver: an additional 25% of the property’s value, on top of the interest.

The word “willful” is doing work. The $100-per-day penalty and the 25% surcharge only apply to intentional failures. An accidental late filing still triggers the 12% interest, which compounds quickly on large balances, but the additional civil penalties are off the table. If a holder refuses to cooperate, the administrator can go to court to enforce the act.⁶

Audits are the department’s main tool for finding unreported property. Examinations can be conducted by the department or by an authorized third-party auditor, and they are often triggered when a business has never filed, appears to have underreported, or shows patterns out of step with its size and industry.⁷

Voluntary Disclosure for Businesses Behind on Filings

A business that has never reported unclaimed property or has underreported in past years can enter a Voluntary Disclosure Agreement with the Department of Treasury. Under a VDA, the holder commits to filing accurate reports and remitting unreported property for the current year plus the previous four reporting years, all within six months of signing. In exchange, the department waives all penalties and interest.⁵

An audit can reach further back than four years and can assess the full penalty and interest amounts. A holder that receives an audit notice loses access to the VDA program, so the window to come forward voluntarily closes the moment the state starts asking questions.

Which State Gets the Property

For businesses with owners in more than one state, priority follows a two-tier rule from the U.S. Supreme Court. The property goes first to the state of the owner’s last known address in the holder’s records. If those records don’t include a usable address, the property goes to the state where the holder is incorporated.

Michigan’s statute mirrors this. If another state later proves the owner’s actual last known address was within its borders, it can petition Michigan to recover the property. The Department of Treasury has to decide these interstate claims within 90 days, and the claiming state must indemnify Michigan against any future claims on the same property.²

Searching for and Claiming Your Property

The Department of Treasury runs a free online database where anyone can search by name to see whether the state is holding property for them. The search takes a few minutes on the department’s unclaimed property website.¹

To claim, you file through the department with documentation proving identity and ownership. What you need depends on the type and value of the property but generally includes government-issued photo ID and records connecting you to the account or asset. The department reviews each claim to verify ownership and prevent fraud.

There is no deadline. The state holds the funds indefinitely as custodian until the rightful owner comes forward, so passage of time alone does not extinguish your right to the property.⁸

Watch Out for Finder Fees

Companies that offer to locate unclaimed property for a cut of the recovery operate under strict limits in Michigan. Any agreement to pay a finder is completely unenforceable if it is signed within 24 months of the date the property was delivered to the state. After 24 months, a finder agreement is enforceable only if it is in writing, describes the property and services, is signed by the owner, discloses the property’s value before and after the fee, and caps the fee at 25% of the recovered value.² Attorneys hired to contest a denied claim are exempt from these restrictions.

Because you can search the state’s database and file a claim yourself for free, a finder is rarely worth paying.

When a Claim Is Denied

If you believe your property was wrongly escheated or your claim was improperly denied, you can ask the Department of Treasury to review its determination with supporting documentation. If that review does not resolve the dispute, the next step is the Michigan Court of Claims, which has exclusive jurisdiction over claims against the state and its agencies and can decide contested issues under the act.⁹ A Court of Claims action is formal litigation with the state represented by the Attorney General’s office, so retaining counsel is generally advisable.

1
Michigan Unclaimed Property. General FAQs
2
Michigan Legislature. Michigan Compiled Laws Chapter 567 – Uniform Unclaimed Property Act
3
Michigan Legislature. Michigan Compiled Laws 567.237 – Safe Deposit Box Contents
4
Michigan Legislature. Michigan Compiled Laws 567.238 – Report of Presumed Abandoned Property; Duties of Property Holder
5
Michigan Unclaimed Property. Reporting Guidelines
6
Michigan Legislature. Michigan Compiled Laws 567.253 – Enforcement of Action; Jurisdiction
7
Michigan Legislature. Michigan Compiled Laws 567.251 – Report Requirements
8
Michigan Unclaimed Property. How Long Do I Have to Claim My Funds?
9
Michigan Legislature. Michigan Compiled Laws 600.6419 – Court of Claims