SSB 5316
SignedSenate
Unclaimed property
Modifying provisions of the revised uniform unclaimed property act.
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 when and how prearrangement funeral service contract trusts become abandoned and reportable to the state, and makes broader improvements to reporting, notification, and enforcement procedures. It sets new abandonment timelines for funeral contracts and updates rules for holder reporting, owner notification, and administrative processes.
- Prearrangement funeral service contract trusts are now presumed abandoned three years after the earlier of: (1) the beneficiary’s death, (2) the beneficiary reaching age 107, or (3) 50 years from contract execution.
- Funeral establishments may use the Social Security Death Master File (or similar resources) to verify a beneficiary’s death—but are not required to do so.
- The apparent owner of an abandoned funeral contract trust is generally the contract purchaser or beneficiary, but for irrevocable contracts funded by public assistance, it is the Department of Social and Health Services, Office of Financial Recovery.
- Reporting deadlines for holders are clarified: most reports are due by October 31, insurance companies by April 30, and extensions may be granted.
- Notification requirements are updated: holders must notify owners by mail (and email if consented) for property valued at $50 or more, and the Department of Revenue must publish unclaimed property lists annually.
- Dormancy charges are capped at $10/year for property ≤$50 and $20/year for property >$50, unless a valid contract authorizes more (but not unconscionably so).
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 funds to the state.
- Contract purchasers and beneficiaries — Individuals who purchased prearrangement funeral contracts (or their heirs/estates) may have unclaimed trust funds turned over to the state after three years from death, age 107, or 50 years from contract execution—potentially affecting their ability to recover those funds later.
- 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 claim those funds if unclaimed.
- Department of Revenue — The Department of Revenue, as administrator of unclaimed property, must update its reporting, notification, and claims processes to accommodate the new abandonment timelines and reporting standards for funeral contracts.
Pro/Con Analysis
Potential Benefits (5)
The bill formalizes the use of the Social Security Death Master File (SSDMF) and similar resources to verify deaths—providing funeral homes with a standardized, low-cost tool to identify when funeral contracts should be reported as abandoned. This reduces the risk of funds remaining unclaimed due to administrative delays or record-keeping gaps, especially for families who rely on funeral homes to initiate the process.
Public SafetyPeopleRef: Sec. 2(1)(a)(i)The bill strengthens owner notification by requiring both mail and email (if consented) for property ≥$50, and mandates annual public notice via newspaper and a searchable online database. This improves transparency and helps families locate unclaimed funds—particularly beneficial for out-of-state heirs or those with limited access to physical records.
Public SafetyPeopleRef: Sec. 9 & Sec. 10The dormancy charge cap ($10/year for ≤$50, $20/year for >$50) provides a clear, predictable limit on fees—preventing arbitrary or excessive charges that previously could drain small funeral trust balances. This protects consumers, especially low-income contract purchasers, from hidden or punitive fees.
FinancialPeopleRef: Sec. 11The bill clarifies that the reportable amount is the trust balance “inclusive of accrued interest or income, less any amounts authorized by law”—ensuring beneficiaries recover more of the original principal plus growth, rather than just the nominal contributions. This improves fairness and reduces erosion of value over time.
FinancialPeopleRef: Sec. 2(2)(a)The retroactive application to January 1, 2023, ensures consistency across contracts and prevents a patchwork of rules for older vs. newer agreements. This reduces administrative confusion for funeral homes and ensures all contracts—regardless of execution date—are subject to the same abandonment and reporting standards.
FinancialLean peopleRef: Sec. 27
Potential Concerns (5)
The bill explicitly states that funeral establishments “may but are under no duty to compare its records to the United States social security administration death master file”—meaning many small funeral homes may not proactively verify deaths, increasing the risk that families lose track of unclaimed trust funds after a loved one dies. This passive reporting standard reduces the likelihood that families are proactively notified of abandoned funds, potentially leading to lost assets and delayed claims.
Public SafetyRef: Sec. 2(1)(a)(ii)While the bill allows use of the Social Security Death Master File (SSDMF) to verify deaths, it does not require cross-checking with state vital records or death certificates—sources that are more reliable for confirming deaths in Washington. Relying solely on SSDMF increases the risk of false positives (e.g., matching errors due to common names) or false negatives (e.g., delays in SSDMF updates), potentially causing premature escheatment or delayed claims.
Public SafetyRef: Sec. 2(1)(a)(i)The bill caps dormancy charges at $10/year for property ≤$50 and $20/year for property >$50—but allows contracts to authorize higher charges “unless unconscionable.” Since “unconscionable” is undefined and subject to holder interpretation, low-balance accounts (common for funeral trusts) may still face disproportionately high fees relative to value, eroding principal and reducing recoverable amounts for families.
FinancialLean peopleRef: Sec. 2(1)(c) & Sec. 11The three-year abandonment window—triggered by death, age 107, or 50 years—may be too short for families to locate and claim funds, especially when beneficiaries die unexpectedly or records are lost. For low-income or rural families, the burden of tracking down old contracts and navigating state claims processes may be prohibitive, leading to permanent loss of funds.
FinancialPeopleRef: Sec. 2(1)(a) & Sec. 2(2)(a)The bill designates the Department of Social and Health Services (OFOR) as the apparent owner for irrevocable funeral contracts funded with public assistance (e.g., Medicaid). This means any unclaimed funds from publicly subsidized funeral trusts go directly to the state—not the family—effectively converting what was intended as a welfare benefit into a revenue source, despite the original purpose being to ensure dignified burial for low-income residents.
FinancialPeopleRef: Sec. 2(2)(b)
Who Is Most Affected
Funeral establishments gain clarity on reporting timelines and verification methods, reducing liability risk—but face new administrative burdens (e.g., verifying deaths, reporting obligations) and potential reputational harm if families lose access to funds. Small operators may lack resources to implement robust record checks, while larger chains may absorb costs more easily.
Contract purchasers and beneficiaries—especially low-income, elderly, or rural families—benefit from improved notice and fee caps, but are disproportionately harmed by the state’s claim to irrevocable public-assistance-funded trusts and the risk of premature escheatment due to passive verification standards.
DSHS/OFOR gains legal authority to claim unclaimed funds from Medicaid-funded funeral trusts, improving state revenue certainty—but faces ethical scrutiny for converting welfare-funded benefits into general revenue, potentially undermining trust in public assistance programs.
DOR gains clearer reporting standards and enforcement tools, improving program efficiency—but faces increased administrative costs for managing funeral contract claims and verifying abandonment timelines, which may strain resources without dedicated funding.