SHB 1127
In CommitteeHouse
Unclaimed property
Modifying provisions of the revised uniform unclaimed property act.
This status may be delayed. See Action History below for the latest updates.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill updates Washington’s Unclaimed Property Act to clarify and extend abandonment timelines for prearrangement funeral service contract trusts, reduce reporting thresholds, and modernize holder obligations—including electronic filing, owner notification, and verification of deaths. It also tightens rules around penalties, refunds, and confidentiality.
- Creates a new abandonment timeline for prearrangement funeral service contract trusts: property is presumed abandoned 3 years after the beneficiary’s death, or when the beneficiary would have turned 107, or 50 years after the contract was signed—whichever comes first.
- Requires funeral establishments to use reasonable methods (e.g., Social Security Death Master File) to verify a beneficiary’s death, though they are not required to actively check it.
- Clarifies that for irrevocable funeral contracts funded with public money, the Department of Social and Health Services, Office of Financial Recovery, is the apparent owner of unclaimed trust funds.
- Amends reporting deadlines: standard reports due by October 31 (previously November 1), and insurance company reports due by April 30 (previously May 1).
- Reduces the threshold for requiring owner information on reports from $50 to $5, and for sending notice to owners from $75 to $50—expanding reporting and notice obligations.
- Revises abandonment timelines for various property types (e.g., stored value cards, retirement accounts, wages) and updates holder notice and reporting requirements, including electronic filing/payment rules and penalties for noncompliance.
Who is affected
- Funeral establishments — Funeral establishments that sell prearrangement funeral service contracts must now follow new abandonment rules and reporting requirements for trust funds tied to those contracts, including verifying deaths using public records (like the Social Security Death Master File) and reporting abandoned trust balances to the state.
- Contract purchasers and beneficiaries — Individuals who purchased or were named as beneficiaries in prearrangement funeral contracts may have unused trust funds turned over to the state after 3 years from death, age 107, or 50 years from contract execution—unless claimed earlier. Families or heirs may need to file claims to recover funds.
- Department of Social and Health Services (Office of Financial Recovery) — The Department of Social and Health Services, Office of Financial Recovery, is designated as the apparent owner for irrevocable funeral contracts where public funds (e.g., Medicaid) were used to fund the trust—meaning the state may reclaim those funds if unclaimed.
- Department of Revenue — The Washington State Department of Revenue, as administrator of unclaimed property, must update reporting, notice, and claims procedures—including new rules for prearranged funeral trusts—and will collect and hold abandoned property until claimed.
- Holders of unclaimed property (e.g., banks, insurers, utilities) — Insurance companies and other holders of unclaimed property must comply with revised reporting deadlines, electronic filing/payment requirements, and updated abandonment timelines for various property types (e.g., deposits, wages, stored value cards).
Pro/Con Analysis
Stronger case for benefits
Potential Benefits (5)
The bill establishes a clear, time-bound abandonment timeline for prearranged funeral contracts — 3 years after death, age 107, or 50 years from execution — which prevents indefinite holding of trust funds and ensures unclaimed assets eventually return to the state for potential recovery by heirs. This protects families from perpetual uncertainty and potential fraud by unscrupulous funeral homes.
Public SafetyPeopleRef: Sec. 2(1)(a)(i) and Sec. 2(1)(b)Lowering the notice and reporting thresholds ($5 for owner info, $50 for owner notice) and requiring electronic filing increases transparency and outreach to potential owners, making it more likely that everyday Washingtonians — especially seniors, low-income families, and heirs of deceased relatives — will be located and notified about unclaimed funds. This directly improves recovery rates for vulnerable populations.
FinancialPeopleRef: Sec. 9 (amending RCW 63.30.280(1)) and Sec. 10 (amending RCW 63.30.300(2))The bill strengthens refund procedures for holders who overpaid or delivered property in error, including a 90-day review deadline and interest on refunds — reducing the risk that businesses (including small funeral homes) lose money due to administrative errors, and enabling faster resolution for claimants. This promotes fairness and predictability in the unclaimed property process.
FinancialPeopleRef: Sec. 13 (amending RCW 63.30.360)The bill caps penalties for fraudulent reporting at $25,000 + 25% of underreported value, and allows for waiver of penalties for good faith errors — providing a more proportionate enforcement framework that discourages abusive practices while protecting small businesses from disproportionate fines for unintentional mistakes.
Business & EmploymentLean peopleRef: Sec. 20 (amending RCW 63.30.690(5))The requirement that the Department of Revenue maintain a publicly searchable database of unclaimed property — with instructions and printable claim forms — significantly improves accessibility for everyday Washingtonians to locate and reclaim assets, especially those without internet literacy or who rely on public libraries for access.
Public SafetyLean peopleRef: Sec. 10 (amending RCW 63.30.300(3)(b))
Potential Concerns (5)
The bill explicitly states that funeral establishments are *not required* to check the Social Security Death Master File to verify a beneficiary’s death — only that they *may* do so. This creates a risk that some beneficiaries’ deaths go unverified, leaving trust funds in limbo or improperly retained by funeral homes instead of being turned over to the state for potential claim by heirs. This undermines the purpose of the abandonment timeline and increases the burden on families to locate and claim funds.
Public SafetyPeopleRef: Sec. 2(1)(a)(ii)The 50-year abandonment timeline for funeral contracts — the longest in the bill — means that for many low- and middle-income families who preplan funerals as a cost-saving measure, unused trust funds may be escheated to the state only after half a century, effectively locking heirs out of accessing those funds during their lifetimes. This disproportionately affects families who rely on such contracts to avoid future financial burden but lack the means to track or reclaim funds decades later.
HousingPeopleRef: Sec. 2(1)(c) and Sec. 2(2)(a)The bill designates the Department of Social and Health Services (OFRA) as the apparent owner for irrevocable funeral trusts funded with public money (e.g., Medicaid). While this prevents misuse of public funds, it also means that low-income individuals who relied on Medicaid-funded funeral trusts may have no direct path to reclaim those funds — the state becomes the legal owner, and heirs must navigate complex administrative claims processes, if they qualify at all.
FinancialLean peopleRef: Sec. 2(2)(b)The reduction in the reporting threshold for owner information from $50 to $5 and for notice to owners from $75 to $50 expands administrative burdens on small funeral homes and holders — many of whom operate on thin margins — without providing offsetting support. While this increases state oversight, it may divert limited resources from direct service to families toward compliance, especially for micro-businesses and sole proprietorships.
FinancialLean peopleRef: Sec. 7 (amending RCW 63.30.230(d))The requirement that holders liquidate virtual currency within 30 days before reporting — and that owners have *no recourse* for post-liquidation value gains — exposes holders (including small tech-savvy businesses and sole proprietors) to market volatility risk. While the provision protects the state from overvalued assets, it shifts all downside risk to businesses that may not have the expertise or infrastructure to manage digital assets safely.
Business & EmploymentLean peopleRef: Sec. 12 (amending RCW 63.30.340(7))
Who Is Most Affected
Funeral establishments face increased compliance costs (e.g., death verification, electronic reporting), but benefit from clearer rules and capped penalties. Small mom-and-pop shops may struggle with new thresholds ($5 reporting), while larger chains may absorb costs more easily. Overall, mixed impact — negative for small operators, neutral for large ones.
Beneficiaries and heirs gain stronger protections and better notice mechanisms, but may still face delays or barriers if deaths are not verified (e.g., via SSNDB), or if funds are escheated after 50 years. Low-income families using Medicaid-funded trusts may lose direct access to funds. Net positive for most, but with notable gaps.
The Department of Social and Health Services gains legal authority to reclaim public funds, improving fiscal integrity of Medicaid programs. However, this may reduce direct benefit to low-income individuals who relied on those trusts — shifting control to the state. Mixed: positive for state budget, negative for individual claimants.
The Department of Revenue gains expanded authority and responsibilities (e.g., electronic filing, database maintenance), increasing administrative workload but also public trust in the system. No direct fiscal impact, but increased operational costs. Neutral for the agency, positive for public confidence.
Holders (e.g., banks, insurers, funeral homes) face tighter deadlines, lower thresholds, and new verification duties — increasing compliance costs. However, clearer rules and penalty caps reduce legal risk. Net negative for small holders, neutral for large institutions. Overall, slightly negative impact.