• Limiting State Anti-Limitations Provisions
  • November 21, 2012 | Author: Ethan D. Millar
  • Law Firm: Alston & Bird LLP - Los Angeles Office
  • In unclaimed property audits and in voluntary disclosures, states commonly take the position that time-based contractual limitations on an owner’s right to claim unclaimed property may be disregarded by the state. That allows states to seize unclaimed property even if the owner no longer has a right to claim the property. States justify that position based on so-called anti-limitations provisions that provide that the expiration of a contractual period of limitation on the owner’s right to claim property does not prevent the property from being presumed abandoned. Not all states have adopted those provisions, though, and therefore sometimes a state will seek to ignore these contractual limitations based on a common law doctrine known as private escheat. However, the idea that a state can claim property that the owner himself could not claim flies in the face of basic unclaimed property principles, and is also contrary to common sense and good public policy. As a result, the anti-limitations provisions should, like the private escheat cases on which they are based, be limited to very unusual and abusive circumstances.