Unclaimed property hot topics: Top 5 issues for 2026

The unclaimed property landscape will continue to evolve rapidly in 2026. States are modifying their enforcement methods and broadening the reach of their statutes while simultaneously facing increased legal challenges from aggrieved property owners.

1. The proliferation of self-review “invitations” as an initial step for regulatory enforcement

The methods state regulators use to enforce unclaimed property laws continue to transform and expand. In lieu of direct examination, states are more frequently “inviting” companies to conduct managed “self-reviews,” often under the administration of a private audit firm. Although potentially less contentious than a full exam, companies may be expected to complete reviews that meet the same intensive standards as a full examination, and typically within much shorter time frames. Many companies are now receiving an overlapping flurry of self-review notices from different states at different times, increasing the likelihood of a seemingly never-ending review cycle. But failure to promptly respond to and comply with state self-review requests risks escalation to more contentious exam processes.

Delaware continues to lead the way with “invitations” to its Voluntary Disclosure Agreement program (VDA), with the next batch of notices scheduled for April 2026. Companies that do not respond to a VDA invitation within 90 days are automatically referred for a full examination, with mandatory interest and penalties on any findings. California has been sending outreach letters about enrolling in its Voluntary Compliance Program (VCP) and intends to send more letters in 2026. California’s VCP waives the 12% annual interest rate on past-due payments for property that the state frequently assesses for late filings and in examinations. Other states, such as Indiana and Utah, are also in the mix.

2. Whether unclaimed property examinations can last forever

A long-running Michigan lawsuit raises the question of whether states can conduct examinations that go on indefinitely (e.g., ten years or more) or whether there are time limits on state enforcement efforts.¹ The Michigan Supreme Court is poised to give its final answer this year. As we discussed in a prior legal alert, an appeals court decision from 2025 would allow the state to enforce an assessment extending back more than two decades. The central issue in the case is how to apply the state’s ten-year statute of limitations. The appeals court reasoned that an audit determination issued after a nine-year exam process created a new legal obligation for the company, effectively reviving otherwise time-barred claims.

The decision has been appealed to the Michigan Supreme Court, which will likely provide a final resolution in 2026. Because Michigan’s unclaimed property statute is based on a model unclaimed property act adopted by numerous other states,² this decision has nationwide implications.

3. New reporting rules for digital assets and cryptocurrency

As federal digital asset policy develops, US states have significantly expanded the application of unclaimed property laws to cryptocurrency and other digital assets. Nearly 20 states have recently enacted laws requiring digital custodians to report and remit inactive customer accounts to state treasuries as unclaimed property, and a key split has emerged in their approaches. An initial wave of states requires custodians to liquidate customer digital assets and deliver funds to state treasuries in US dollars. For accounts presumed abandoned (typically after three years of inactivity), these statutes generally require custodians to liquidate digital assets and deliver the proceeds to the state treasury within 30 days of the annual reporting deadline. This approach diverges from established escheatment practices for other types of assets, such as unclaimed securities, which are typically delivered to the state in their original, native form.

Other states have adopted a more measured approach. In May 2025, Arizona became the first state to enact legislation establishing a state reserve fund for holding abandoned digital assets in their native form through a state-appointed custodian,³ and California followed with a newly enacted statute that will require unclaimed digital assets to be delivered to a state custodian.⁴ However, most state unclaimed property statutes still do not directly address digital assets, creating uncertainty for custodians on how to handle inactive accounts across multiple jurisdictions. The variance in state statutes creates significant compliance challenges, particularly in states without specific digital asset legislation. The risks to both custodians and investors are substantial because, even when states accept assets in native form, many states liquidate non-dollar assets shortly after receipt. As the history of unclaimed property securities reporting demonstrates, these risks can lead to lawsuits against both states and companies for negligent escheatment and takings.

4. Death, dormancy, and the adoption of non-uniform standards

States are increasingly departing from the uniform framework of model acts, and a significant example is the treatment of property upon the owner’s or customer’s death. Although death was already relevant to abandonment for certain property types, such as life insurance and individual retirement accounts, some states are now using death as a universal trigger for all property types, and, in some cases, they are shortening the dormancy periods following death.⁵ For example, Florida,⁶ Nevada,⁷ New York,⁸ and Oregon⁹ have enacted new laws and regulations extending beyond traditional applications of death dormancy triggers. The emergence of these death triggers, with rules that vary by state, creates substantial legal risks for companies.

Moreover, although these new death-related provisions do not expressly require companies to search for death information, state examiners may leverage these provisions to identify additional unclaimed property and accelerate reporting deadlines. Third-party examiners routinely compare company records against death records to identify potential unclaimed property, and these new rules may encourage expanded use of such techniques in contested exams.

5. States under fire for alleged takings claims and due process violations

A number of states are defending litigation by property owners challenging their unclaimed property practices. These challenges include claims that states have improperly cut off amounts owed to claimants, failed to pay interest on claims, or caused significant losses through securities liquidation. In 2025, Ohio enacted legislation that provided $600 million in public funding for a new Cleveland Browns stadium by requiring that the state take permanent possession of escheated funds after ten years, prompting lawsuits alleging unconstitutional takings and due process violations.¹⁰ The plaintiffs contend that Ohio is treating the property as state-owned rather than holding it in trust for rightful owners. A state court has frozen the escheated funds pending further proceedings, while a federal court denied a preliminary injunction, with that denial currently on appeal.

Other property owners are suing states for liquidating their securities while they are in state custody. After securities are delivered to states as unclaimed property, states typically sell the securities after a period of time. If an owner later comes forward to claim their property, the state typically returns only the proceeds of the sale and not the current value of the securities, which may have increased significantly due to the passage of time. In litigation, class actions filed in multiple states allege that the states’ failure to pay interest on owner claims constitutes an unlawful taking. These legal challenges underscore the need for companies to ensure their escheatment practices comply with applicable state requirements. When owners are unable to recover the full value from the states, the risk increases that owners will pursue litigation directly against reporting companies (which may, or may not, be the holder) if there were any perceived errors in the reporting.

Conclusion

As the unclaimed property landscape continues to evolve, 2026 will be a pivotal year for reassessing unclaimed property strategies and ensuring robust compliance frameworks.