On August 5, 2014, the Florida First District Court of Appeal decided when unclaimed life insurance proceeds become due and payable and subsequently when the state’s five year dormancy period begins which determines when those funds escheat to the state. The court held that the insurer must receive proof of death and surrender of the policy, otherwise know that the insured has died, or the insured has attained, or would have attained if living, the limiting age of the policy. In addition, the court decided that an insurer has no affirmative duty to search death records to determine an insured’s status.

Similar decisions have been made in West Virginia, Massachusetts, and Ohio, There have not been any rulings to the contrary.

See Andrew Kay and Catherine Rosato Reilly “Unclaimed Property: Court Holds Life Insurer’s Escheatment Duties Not Triggered By Insured’s Death” JDSupra Business Advisor (August 19, 2014)

Posted by Ryan Moore, Associate Editor, Wealth Strategies Journal