- Delaware recently issued invitation notices for their unclaimed property voluntary disclosure program.
- If your company received one of these notices, do not ignore it. Before deciding, understand the benefits of the voluntary disclosure program and keep in mind the ninety-day response period.
- The Delaware Secretary of State recently hosted a Webinar with more information on the voluntary disclosure program.
Background
If your organization is incorporated in Delaware, you may have recently received or may soon receive a notice inviting your company to join the state’s Voluntary Disclosure Agreement (“VDA”) program, administered by the Delaware Secretary of State (“SOS”). These notices are not simply informational and should not be ignored.
What is Unclaimed Property and Why Does Delaware Care?
Unclaimed property refers to financial assets, obligations or tangible items that have been abandoned, forgotten or otherwise unrecovered by their rightful owners and remain in the possession of the holder owing such obligation. The property becomes unclaimed or abandoned once it has remained unsettled beyond a period of time defined by the state to which it is sourced (referred to as the dormancy period). The types of property that are potentially classified as unclaimed property are determined by, and may vary by, state. Examples of typical unclaimed property include uncashed checks, customer refunds or credits, unredeemed gift cards, and safe deposit box contents. Once property has become dormant, if holders are still unable to reunite property with the rightful owners, they are legally required to report and remit these properties to the appropriate state.
State sourcing for unclaimed property reporting follows a set of priority rules established by the U.S. Supreme Court in Texas v. New Jersey (1965), which are still widely used today. If a company is unable to identify a rightful owner's address, or if the address is international and not subject to escheat laws within that country, the property typically defaults to the state of incorporation or formation. For many businesses, that means Delaware, which is the state of incorporation / formation to over 400,000 corporations, including more than two thirds of the Fortune 500, as well as over a million other business types such as limited liability companies, partnerships and trusts.
With unclaimed property audits and VDA programs typically looking back at least ten report years, the likelihood of companies maintaining records and addresses going back this far for all transactions is typically low. Therefore, as estimates are used for periods and property types where records are not available, the state of incorporation becomes important as that is the jurisdiction to which estimated unclaimed property is typically sourced. As mentioned above, with so many businesses being incorporated in Delaware, unknown addresses and estimations become a crucial part of many of the audits or VDAs conducted by the state.
Forvis Mazars Insight: Even if unclaimed property is buttoned up in recent years, the long lookback periods of audits and VDAs can bring to light activity where limited records were available and / or processes may not have been refined. As companies are going through acquisitions, system conversions and data retention policies, unclaimed property considerations should be top of mind for this reason.
Delaware VDA Program Invitation
Delaware SOS periodically sends VDA invitations to companies potentially out of compliance and has recently been issuing these invitations twice a year. In 2025, invitations were issued on April 11 and August 15. Recipients have ninety days to respond to the invitation. For those who received the letter of August 15, the deadline to respond is November 13.
It should not be taken lightly if your company did receive an invitation, as any company that has not chosen to participate in the VDA program will likely be subject to an unclaimed property audit administered by the Delaware Department of Finance and their third-party audit representatives.
Forvis Mazars Insight: The ninety-day response window is a firm deadline so companies should monitor incoming mail closely to be sure that the response deadline is not missed.
Delaware VDA Program Details
Historically, unclaimed property enforcement was handled solely by the Department of Finance along with third-party auditors representing it. In 2012, Delaware introduced the VDA program through the SOS as a more collaborative alternative to audits.
Benefits of the VDA program include:
- Shorter look-back periods
- Flexibility in scope
- Faster resolution than audits
- Waiver of penalties and interest
- Indemnification against other states and claimants
Participants primarily work with one of three third-party vendors engaged by the state to act as their representative. In addition to these third parties, Delaware encourages companies to engage with and work collaboratively with consultants who are experienced with the Delaware VDA program and assist holders throughout the process.
Next Steps
It is important to keep response deadlines and potential options in mind if you did receive a VDA notice from Delaware, as ignoring these could potentially lead to a full examination by Delaware.
Recent Webinar
To support these compliance efforts, Delaware recently hosted an informational webinar on September 9 focused on its VDA program. This session was designed to help companies better understand their obligations, the benefits of participating in the VDA program, and how to navigate the process effectively. Representatives from Delaware SOS, as well as their third-party vendors, presented. Once archived, this webinar may be found at the following link along with other prior webinars hosted by the SOS.
Disclaimer: The information set forth in this presentation contains the analysis and conclusions of the author(s) based upon their research and analysis of industry information and legal authorities. Such analysis and conclusions should not be deemed opinions or conclusions by Forvis Mazars or the author(s) as to any individual situation as situations are fact-specific. The reader should perform their own analysis and form their own conclusions regarding any specific situation. Further, the author(s)’ conclusions may be revised without notice with or without changes in industry information and legal authorities.
How Forvis Mazars Can Help
Forvis Mazars has experience with the Delaware VDA program and can offer unclaimed property assistance, help you navigate the decision process, and provide support during the VDA or other remediation options your company may be considering.
If you did not receive a notice but are still considering a VDA outside of the invitation process or have other unclaimed property questions, please reach out to a professional at Forvis Mazars.