Numbered Letter 2009-01 (Revised)

Effective Date: August 2009 (Revised Date November 25, 2025)

Requirements of Units of Local Government for Reporting Unclaimed Property

Under Public Act 29 of 1995, the Uniformed Unclaimed Property Act, the Michigan State Treasurer is the administrator and acts as custodian of the property on behalf of the owner. The Act protects unclaimed property and returns it to its rightful owners or their heirs. The State Treasurer takes custody of the property so the owner may claim it, even if the original holder is no longer in business. The Act also centralizes the search for lost property in one place, Unclaimed Property of within the Michigan Department of Treasury.

Michigan Compiled Law (MCL) 567.234 states: “Property held for the owner by a court, state, or other government, governmental subdivision or agency, public corporation, or public authority that remains unclaimed by the owner for more than 1 year after becoming payable or distributable is presumed abandoned."

The law requires the person holding unclaimed property presumed abandoned and subject to the State’s custody, to send written notification (“due diligence letter”) to the owner at their last known address informing them that the property is subject to be turned over to the State of Michigan. The notice must be sent not less than 60 days before filing the report to the State of Michigan. This requirement only applies if all the following conditions are met as required by MCL 567.238:

1. If the property has a value of $50.00 or more;
2. The address for the owner does not appear to be inaccurate; and
3. The statute of limitation does not bar the claim of the owner.

MCL 567.238 requires the report, along with the unclaimed property, to be filed with the State Treasurer on or before July 1 of each year for the twelve-month period ending on the immediately preceding March 31. The report must contain all known identifying information regarding the ownership of the property, such as owner name, complete Social Security number, last-known address and any other available detail to allow Unclaimed Property to authenticate ownership when funds are claimed.  A 60-day extension may be available upon written request submitted prior to the reporting deadline. Failure to pay or deliver unclaimed property within the time prescribed by MCL 567.255 of the Act subjects the holder to penalties and interest.

Interest is assessed (on the property or value of the property) at the current monthly rate of 1 percent above the adjusted prime rate per annum per month from the date the

property should have been paid or delivered to the State Treasurer. Penalty is calculated at 25 percent of the value of the property that should have been paid or delivered.

Who should report?

The Uniform Unclaimed Property Act is silent as to what official has the responsibility to complete the report and escheat unclaimed property to the State of Michigan. MCL 567.238 states, “the person holding property presumed abandoned and subject to the State’s custody as unclaimed property under this Act shall report to the administrator (State Treasurer) concerning the property as provided in this section.” However, in other statutory provisions, the local governmental unit treasurer has statutory responsibility as the custodian of all funds in the local unit of government.

Outstanding checks that are considered abandoned should be escheated to the State. In accordance with generally accepted accounting principles, outstanding checks should not be recorded as an escheat asset within governmental or proprietary funds, as it will ultimately not become the property of the local unit. The local unit would need to record an escheat asset and corresponding escheat liability and should be reported in a Custodial Fund since unclaimed property must be transferred to the state.  For best practice, the local unit should review records for escheat property at the fiscal year end and every March 31st. Reviewing records as of the fiscal year end will help ensure that the financial statements are not misstated by an asset that does not belong to the local unit and every March 31st to ensure statutory compliance. 

In a county, the county treasurer would have the responsibility to complete the report under MCL 567.238 as the person holding the property presumed abandoned and subject to the State’s custody as unclaimed property under this Act. In the case of the county, a letter should be sent to the various departments directing them to send all unclaimed outstanding checks to the county treasurer for deposit into the General Custodial Fund as “Unclaimed Money.”

For questions or additional information, please contact the Unclaimed Property Division at 517-636-6940, email TreasUPDReporting@michigan.gov or write:

Michigan Department of Treasury
Unclaimed Property
P.O. Box 30756
Lansing, Michigan 48909