Maryland Attorney General Opinion 108OAG21

Gen. 21] 21

ABANDONED PROPERTY

STATUTORY INTERPRETATION – MARYLAND 529 – WHETHER

THE MARYLAND UNIFORM DISPOSITION OF ABANDONED

PROPERTY ACT APPLIES TO ACCOUNTS IN THE PROGRAMS

OFFERED BY MARYLAND 529

May 15, 2023

Geoffrey F. Newman

Board Chair, Maryland 529

Maryland 529 has asked whether the Maryland Uniform

Disposition of Abandoned Property Act (the “Abandoned Property

Act,” or the “Act”) applies to accounts in the three tax-advantaged

college and disability savings programs that Maryland 529 offers.

If the Act applies to the accounts, Maryland 529 has also asked for

guidance on how to comply with it.

In our opinion, although Maryland 529 has not been explicitly

exempted from the Act, the Act does not apply to Maryland 529

accounts. The Maryland 529 programs have tax advantages that

facilitate long-term savings. These tax advantages encourage

families to invest decades ahead of expected college or disability

expenses so that market appreciation might help them meet their

goals. The Act, in contrast, generally presumes property to be

abandoned if left dormant for three years. Application of the Act’s

mandates would tend to interrupt family savings plans prematurely,

trigger tax consequences and penalties that defy common sense,

and clash with language in Maryland 529’s enabling statutes that

seeks to safeguard account funds from diversion to other State uses.

For these reasons, we think the General Assembly did not intend

the Act to apply to the accounts when it enacted the enabling

statutes.

Given this conclusion, we need not offer guidance on how to

apply the Act to the accounts. We note, however, that the Act likely

does apply to sums payable on distribution checks that your agency

issues that draw against 529 account balances. Thus, if such sums

remain unclaimed for three years, Maryland 529 generally should

presume that they are abandoned under the Act. We also note that

Maryland 529 should consult the unclaimed property laws of other

states, as opposed to the Act, for unclaimed accounts, checks, or

other property that your agency holds for program participants with

out-of-state addresses.

22 [108 Op. Att’y

I

Background

A. Maryland 529

Maryland 529 offers three programs to help families save for

specific types of expenses.1 See Md. Code Ann., Educ. (“Educ.”)

§ 18-1902.1; Revised Fiscal & Policy Note, S.B. 959, 2023 Leg.,

Reg. Sess. at 6. Two of the programs are college savings plans: the

Maryland Senator Edward J. Kasemeyer Prepaid College Trust

(“Prepaid Trust” or “MPCT”), and the Maryland Senator Edward

J. Kasemeyer College Investment Plan (“Investment Plan” or

“MCIP”). The third program, called the Maryland Achieving a

Better Life Experience Program (“ABLE”), is for disability-related

expenses.2 Most states have similar programs. U.S. Gov’t

Accountability Off., GAO-13-64, Higher Education: A Small

Percentage of Families Save in 529 Plans 10 (2012); ABLE

National Resource Center, Map Tool, https://www.ablenrc.org/select

-a-state-program/ (last visited Apr. 25, 2023).

The General Assembly established the programs to conform

to two sections of the Internal Revenue Code: section 529, which

authorizes federal tax benefits for investments in state college

savings programs; and section 529A, which authorizes similar

benefits for state ABLE programs. 26 U.S.C. §§ 529, 529A; see 87

Opinions of the Attorney General 137, 138 (2002) (discussing

origins of the college savings plans). For convenience, we refer to

all three Maryland 529 programs as “529 programs,” and the

accounts within them as “529 accounts,” even though ABLE is

technically a 529A program.

The three programs differ. As discussed in more detail later,

the Prepaid Trust has defined benefits (the payment of in-state

tuition), while the Investment Plan is a defined contribution

program—families elect how much to invest without committing

to a fixed education benefit. See 87 Opinions of the Attorney

General at 138-40. ABLE is also a defined contribution program,

but for disability instead of education expenses. Maryland 529,

Maryland ABLE Disclosure Statement, at 6-7 (Dec. 1, 2021)

1

Until 2016, Maryland 529 was called the College Savings Plans of

Maryland. 2016 Md. Laws, ch. 39.

2

A fourth program, the Maryland Broker-Dealer College Investment

Plan, has been authorized by statute since 2008 but never implemented.

Educ. § 18-19B-02(a); see Revised Fiscal & Policy Note, S.B. 959, 2023

Leg., Reg. Sess. at 8.

Gen. 21] 23

(“ABLE Discl.”), https://www.marylandable.org/assets/docs/mary

land-able-plan-disclosure-booklet.pdf.

All three programs, however, share a common element with

each other and with similar programs in other states: a package of

tax advantages and penalties designed to encourage people to save

early for college and disability expenses. See Fiscal & Policy Note,

H.B. 431, 2016 Leg., Reg. Sess., at 4 (“ABLE Fiscal Note”). The

primary advantage is tax-free investment growth. Earnings on

money invested through the programs are not subject to federal or

Maryland income taxes so long as they are spent as intended—that

is, on qualified educational expenses (in the case of the college

programs) or qualified disability expenses (in the case of ABLE).

Id. But if the investor withdraws funds from a 529 account and

does not use them for qualified expenses, federal and Maryland

income taxes generally apply, along with a ten percent federal tax

penalty. See 26 U.S.C. §§ 529(c)(3)(A) (cross-referencing 26

U.S.C. § 72), 529A(c); Maryland 529, MCIP Disclosure Statement,

at 2, 5 (2021-2022) (discussing the 10% “Distribution Tax”)

(“MCIP Discl.”), https://maryland529.com/Portals/0/Files/MCIP_

Disclosure_Statement.pdf. For federal tax purposes, the framework

has similar features to Roth Individual Retirement Accounts

(“IRAs”): investments consist of after-tax dollars that grow and

may be withdrawn tax-free so long as they go to the intended

purpose. The threat of penalties on top of taxes for non-qualified

withdrawals discourages people from straying from the purpose of

the savings plan. See generally Internal Revenue Service, Pub.

590-A, Contributions to Individual Retirement Arrangements

(IRAs) (2023) (“IRS Pub. 590-A”), https://www.irs.gov/pub/irs-

pdf/p590a.pdf.

Other Maryland and federal tax advantages for 529 accounts

supplement the possibility of tax-free earnings. Maryland offers an

annual State income deduction of up to $2,500 for contributions to

any of the 529 programs. Md. Code Ann., Tax-Gen. (“TG”)

§ 10-208(n), (o), (v); ABLE Fiscal Note at 4. For State tax

purposes, then, annual contributions up to that amount consist of

pre-tax dollars that grow tax-free and may be withdrawn tax-free

so long as they ultimately go to qualified expenditures. Maryland

encourages people to frontload accounts by allowing them to carry

over annual contributions above $2,500 into subsequent tax years.

See TG § 10-208(n)(4), (o)(4), (v)(4). For example, a Maryland

taxpayer may contribute $25,000 to a 529 account and take the

24 [108 Op. Att’y

annual deduction over ten years. See id.3 The federal tax code also

encourages frontloading. Contributions are considered a gift to the

account beneficiary for federal tax purposes, but the code allows

people to contribute five times the annual federal gift tax

exclusion—currently $17,000 (or $85,000 when multiplied by

five)—to a college savings plan and average out the contribution

over the ensuing years to avoid gift tax consequences. 26 U.S.C.

§ 529(c)(2).4 These frontloading incentives encourage people to

maximize the tax-free earnings on an account by investing more

money earlier.

The three Maryland 529 programs share another fundamental

characteristic: fiduciary administration. In the enabling statutes for

the programs, the General Assembly mandated in various ways that

the State officials handling 529 assets must act only to further the

interests of program participants. An eleven-member body called

the Maryland 529 Board (the “Board”) currently oversees all three

programs. Educ. § 18-1904.5 Board members are fiduciaries

subject to bond requirements. Id. §§ 18-1907(a), 18-1908. In

addition, the Board, as authorized by the enabling statutes, has

3

For the Prepaid Trust, there is no limit to the number of years that a

contribution may be carried over. TG § 10-208(n)(4). For the

Investment Plan, the limit is ten additional, consecutive years beyond the

year of the contribution, meaning that a maximum of $27,500 may

ultimately be deducted for a frontloaded contribution. Id.

§ 10-208(o)(4); MCIP Discl. at 5-6. For ABLE, the Maryland statute

allows ten years, TG § 10-208(v)(4), but federal law caps annual

contributions at the gift tax exclusion (currently $17,000) plus some

additional contributions if the beneficiary is working, 26 U.S.C.

§ 529A(b)(2)(B); Internal Revenue Service, What’s New–Estate and Gift

Tax at 6 (Dec. 20, 2022) (gift tax exclusion for 2023 is $17,000),

https://www.irs.gov/businesses/small-businesses-self-employed/whats-

new-estate-and-gift-tax#Form%20706%20Changes. These additional

contributions are capped at the lower of the beneficiary’s compensation

for the current tax year or an amount equal to the Federal Poverty Level

for a one-person household. 26 U.S.C. § 529A(b)(2)(B)(ii); see 2016

ABLE Fiscal Note at 3-4.

4

This federal frontloading incentive does not apply fully to ABLE,

due to the annual contribution cap. See 26 U.S.C. § 529A(b)(2), (c)(2).

5

The Board consists of the Secretary of the Maryland Higher

Education Commission, the State Superintendent of Schools, the State

Treasurer, the State Comptroller, the Chancellor of the University

System of Maryland, the Secretary of Disabilities, and five members of

the public appointed by the Governor who “have significant experience

in finance, accounting, investment management, or other areas that can

be of assistance to the Board.” Educ. § 18-1904(c).

Gen. 21] 25

established each of the three 529 programs as a trust, with Board

members serving as the trustees. Id. §§ 18-1901(p),

18-19A-03(e)(1)(ii), 18-19C-03(e)(1)(iv); see also, e.g., MCIP

Discl. at 2 (describing the Board’s June 13, 2001 Declaration of

Trust for MCIP).6

The trust arrangement emphasizes that funds invested in each

program may be used “solely for the benefit” of the participants

and that “such funds will not and cannot . . . be diverted to other

purposes.” Letter from John K. Barry, Assistant Attorney General,

to Securities and Exchange Comm’n, 1998 WL 178457, at *13

(Apr. 15, 1998). In nearly all circumstances, Maryland 529 may

distribute funds from a 529 account only with the authorization of

the person who established the account. Educ. § 18-19C-04

(“Distributions shall be requested by the designated beneficiary

. . . .”); § 18-19A-04(b) (“Distributions shall be requested by the

account holder.”); § 18-1907(b)(1) (Board must manage MPCT

“solely in the interest of the participants”).7 Further, the enabling

statute for each program protects investments from diversion to

public uses by mandating that funds “may not be considered money

of the State and may not be deposited into the [State] Treasury.”

6

The General Assembly recently enacted legislation to abolish the

Board and transfer responsibility for administering the Maryland 529

savings programs to the State Treasurer, effective June 1, 2023. 2023

Md. Laws, ch. 113 §§ 1, 2, 13. Under the legislation, the Treasurer

succeeds the Board and assumes its fiduciary responsibilities with

respect to the savings programs. Id. §§ 1, 2. The legislation also phases

out the Prepaid Trust by prohibiting the creation of new accounts

beginning on June 1, 2023, and requires the Treasurer to establish a

process for reviewing claims against the Trust. Id. § 1. These measures

respond to complaints of mismanagement of the Prepaid Trust. See

Hearing on S.B. 959 Before the Budget and Taxation Committee, 2023

Leg., Reg. Sess., at 3 (Mar. 15, 2023) (written testimony of Treasurer

Dereck E. Davis) (noting “concerns that account holders have raised

about their earnings”). Although the legislation has significant

ramifications for the administration of the savings programs and for the

Prepaid Trust in particular, it does not bear upon your questions about

the Abandoned Property Act. In addition, because the relevant portions

of the legislation have yet to take effect, we continue to refer to the Board

in this opinion as the entity responsible for administering the savings

programs.

7

The disclosure booklets for each program make this point in more

detail. See, e.g., MCIP Discl. at 28 (“Only you (or the Custodian or other

legal agent, if applicable) can request a distribution, unless a valid court

order directs otherwise.”); MPCT Discl. at 23 (“[O]nly the Account

Holder can control the use and distribution of the benefits in an

account.”).

26 [108 Op. Att’y

Educ. § 18-1903(f) (referring to the Prepaid Trust); see also

§ 18-19A-05(c) (asserting the same for the Investment Plan),

§ 18-19C-05(c) (asserting the same for ABLE). In other words, an

investment toward education or disability expenses in a 529

program cannot “be captured by the State.” Letter from David S.

Iannucci, Deputy Chief of Staff to the Governor, to Sen. Barbara

A. Hoffman (Feb. 18, 1997), Bill File on S.B. 232, 1997 Leg., Reg.

Sess. (“Hoffman Letter”).

Across the three programs, as of mid-2022, Maryland 529 had

more than $9 billion under management for about 300,000

beneficiaries: $7.8 billion for 270,428 beneficiaries in the

Investment Plan; $1.1 billion for 27,683 beneficiaries in the

Prepaid Trust; and $50.5 million for 4,937 beneficiaries in ABLE,

by far the newest of the three programs. Maryland 529, 2022

Annual Report Summary, Cover Letter (Dec. 2022),

https://maryland529.com/Portals/0/Files/AnnualReports/2022/20

22_MD529_Annual%20Report%20Summary.pdf.

We discuss each of the three programs in more detail below.

1. The Maryland Prepaid College Trust

Established in 1997, the Prepaid Trust is the oldest of

Maryland’s 529 programs. 1997 Md. Laws, ch. 110. It “is

analogous to a defined benefit pension plan.” Revised Fiscal Note,

H.B. 11, 2000 Leg., Reg. Sess., at 5 (“MCIP Fiscal Note”).

Families pay in advance for in-state tuition years at public

institutions of higher education in Maryland (“Maryland public

colleges,” for short). Educ. § 18-1909(a), (c); see Maryland 529,

MPCT Disclosure Statement, at 3 (“MPCT Discl.”),

https://maryland529.com/Portals/0/Files/MPCT_Disclosure_State

ment.pdf. They may choose to buy tuition years at community

colleges, 4-year public colleges or universities, or a combination of

these. Educ. § 18-1909(a); MPCT Discl. at 6.

To make the purchase, a family agrees to pay a specified

amount into a Prepaid Trust account. Educ. § 18-1909(d). The

family can opt to make a lump-sum payment up front or to spread

the payment out over monthly or annual installments. MPCT

Discl. at 24-28; see Educ. § 18-1909(d)(1). Because the Board

invests the payments with the expectation that they will appreciate

over time, prepaid tuition years are marginally cheaper for younger

children with later projected college enrollment dates,

notwithstanding the Board’s expectation that college tuition will

rise about five percent annually. MPCT Discl. at 21, 25-28; see

Gen. 21] 27

Educ. § 18-1909(c). In exchange for the payment, the Board agrees

to pay a specified number of tuition years. Educ. § 18-1909(d)(10).

If the beneficiary opts to enroll in a private or out-of-state college

instead of a Maryland public college, the Prepaid Trust pays the

tuition there up to the value of the in-state tuition benefit that the

family purchased. MPCT Discl. at 8.

The enabling statute anticipates two types of participants for

each Prepaid Trust account: the account holder, often a parent, who

controls the account and makes the payments; and the beneficiary,

who is to receive the benefit but does not control the account.

Educ. § 18-1901(c), (m). These two individuals may in theory be

the same—i.e., someone may open an account for him or herself—

but the program framework contemplates that they will ordinarily

be different. See id.; MPCT Discl. at 3. Either the account holder

or the beneficiary must be a resident of Maryland or the District of

Columbia. Educ. § 18-1909(b). The account holder may request a

refund of the account payments, plus certain earnings attributable

to them, at any time. Educ. § 18-1910; MPCT Discl. at 11. In the

first three years after a prepaid account is opened, if a refund is

requested, Maryland 529 withholds fifty percent of the earnings as

a penalty. MPCT Discl. at 11.

As for the defined-benefit tuition payments, the account

holder may request them as early as three years after opening the

account, provided the beneficiary has reached their projected

college enrollment year. MPCT Discl. at 8-9. These benefits are

paid directly to the educational institutions, or to the beneficiary or

account holder, and must be used no later than ten years after the

beneficiary’s projected college enrollment date, plus the number of

tuition years purchased. MPCT Discl. at 10; see Educ.

§ 18-1909(d)(9).8 At the expiration of this benefits period, unless

the Board grants a waiver, the Prepaid Trust’s obligation to pay

tuition benefits terminates, and the payments cease to accrue

earnings. MPCT Discl. at 12-13. The account holder may then

request a refund or rollover the account to another 529 program.

Id. at 13. Rollovers to other tax-advantaged college savings

programs or to ABLE programs are available at all other times too,

although not more than once per year and subject to some

restrictions. Id. at 11.9

8

The Board extends this benefits period for time that the beneficiary

spends in active military service. Educ. § 18-1910(c)(2).

9

Rollovers to the tuition programs of other states are subject to a

penalty in the first three years, and rollovers to ABLE programs are

28 [108 Op. Att’y

2. The Maryland College Investment Plan

Established in 2001, the Investment Plan offers tax-

advantaged accounts that resemble the defined-contribution

aspects of an IRA, but for education savings rather than retirement

savings. 87 Opinions of the Attorney General at 139-40.

Participants choose how much to invest in a range of portfolio

options, and their returns are “based on investment performance,

not tuition cost.” MCIP Fiscal Note at 5. Unlike the Prepaid Trust,

the Investment Plan is open for enrollment nationwide. Educ.

§ 18-19A-04(a). Like the Prepaid Trust, the Investment Plan

distinguishes between account holders, who set up and control

accounts, and beneficiaries. Id. § 18-19A-01.

An account holder may apply Investment Plan distributions,

tax-free, to an array of “qualified higher education expenses”—not

only college tuition, but also room and board, books and supplies,

and up to $10,000 per year for elementary and secondary school

tuition. 26 U.S.C. § 529(e)(3); MCIP Discl. at 3-4. Neither State

nor federal law imposes any restrictions on when the account

holder may withdraw funds. MCIP Discl. at 28. There is no

waiting period to take distributions on the front end, and—unlike

with an IRA—no point at which distributions become mandatory

on the back end. Id.; see Internal Revenue Service, Pub. 590-B,

Distributions from Individual Retirement Arrangements (IRAs) at

7 (2023) (“IRS Pub. 590-B”), https://www.irs.gov/pub/irs-

pdf/p590b.pdf (discussing required minimum distributions from

IRAs). The account holder may change the beneficiary at any time,

apparently even after the original beneficiary’s death, and there are

no tax consequences so long as the new beneficiary is within the

same extended family (out to first cousins) as the original

beneficiary. 26 U.S.C. § 529(c)(3)(C)(ii); see MCIP Discl. at 3, 27.

As with the Prepaid Plan, the account holder may generally roll

funds over to other tax-advantaged college savings plans and

ABLE programs, subject to some restrictions. 26 U.S.C.

§ 529(c)(3)(C)(i), (iii); MCIP Discl. at 30.10

subject to the annual ABLE contribution cap. MPCT Discl. at 11.

Beginning in 2024, account holders may also rollover funds from long-

term Prepaid Trust accounts to Roth IRA accounts with the same

beneficiary, subject to certain restrictions. Secure 2.0 Act of 2022, Pub.

L. No. 117-328, div. T, tit. 1, § 126, 136 Stat. 4459, 5316-18 (2022).

10

As with the Prepaid Trust, starting in 2024, Investment Plan

accounts may be rolled over to Roth IRAs in some circumstances. See

supra note 9.

Gen. 21] 29

3. Maryland ABLE

Established in 2016, two years after Congress authorized the

underlying federal tax advantages, Maryland ABLE seeks to

“[e]ncourage and assist individuals and families in saving private

funds to support individuals with disabilities to maintain health,

independence, and quality of life.” Educ. § 18-19C-02(b)(1); 2016

Md. Laws, ch. 39; Stephen Beck, Jr., Achieving a Better Life

Experience Act of 2014, Pub. L. No. 113-295, div. B, 128 Stat.

4056-74 (2014). A person’s savings in the program do not affect

eligibility for State public benefits and will affect eligibility for

federal means-tested public benefits only when balances exceed

$100,000. See id. § 18-19C-02(b)(2); ABLE Discl. at 8, 20-23.

The concept is to facilitate savings that “will supplement, not

supplant, benefits.” Educ. § 18-19C-02(b)(1). ABLE accounts are

similar to Investment Plan accounts in that people choose how

much to invest across a set of portfolio options. ABLE Discl. at 7.

Although anyone may contribute to an ABLE account,

participants generally create accounts for themselves rather than on

behalf of others. Educ. § 18-1901(b); ABLE Discl. at 14. In other

words, unlike in the college savings plans, beneficiaries generally

control their own accounts—the account holder “is the . . .

beneficiary,” as the statute puts it.11 Educ. § 18-19C-01(d). A

person is only eligible to open an account if they have a serious

disability or blindness and such disability or blindness occurred

before age twenty-six. 26 U.S.C. § 529A(e) (describing qualifying

disabilities); Educ. § 18-19C-01(f).12 There is no State residency

requirement. See Educ. § 18-19C-04; ABLE Discl. at 33. Federal

law caps annual contributions per account holder at the level of the

gift tax exclusion, currently $17,000, plus the account holder’s

income up to the federal poverty level. 26 U.S.C. § 529A(b)(2)(B);

ABLE Discl. at 7. The qualified disability expenses for which the

account holder may take tax-free distributions encompass “any

11

In all three 529 programs, an authorized legal representative, such

as a guardian or person with power of attorney, may control the account

on the account holder’s behalf in some circumstances. ABLE Discl. at

1; MPCT Discl. at 3; MCIP Discl. at 6; see also S.B. 343, 2023 Leg.,

Reg. Sess. (enrolled) (providing that certain persons other than the

designated beneficiary may establish and operate an ABLE account on

behalf of the beneficiary, where the beneficiary is unable to do so

independently).

12

Starting in 2026, this age limit will increase to forty-six. Secure 2.0

Act of 2022, Pub. L. No. 117-328, div. T, tit. 1, § 124, 136 Stat. 4459,

5314 (2022).

30 [108 Op. Att’y

expenses related to the eligible individual’s blindness or

disability,” including those for education, housing, “health,

prevention and wellness,” and many others. 26 U.S.C. § 529A(e);

Educ. § 18-19C-01(h). The account holder may take distributions

or initiate rollovers to college savings programs at any time, subject

to periodic limits (e.g., one distribution per day). Educ. § 18-19C-

04(b); ABLE Discl. at 16, 39-40.

After the death of the account holder, ABLE funds may be

distributed tax-free to cover funeral and burial expenses. 26 U.S.C.

§ 529A(e)(5). At this juncture, federal law also allows any state to

obtain payment from the account for medical assistance that the

state paid for the account holder under its Medicaid program after

the account was established. 26 U.S.C. § 529A(f). Maryland,

however, prohibits its State agencies from seeking such recovery

from ABLE accounts, unless federal law requires otherwise. Educ.

§ 18-19C-10(b). Amounts in the account not subject to State

claims may go to the beneficiary’s estate or to another individual

eligible to hold an ABLE account. Id. § 18-19C-10(a).

B. Unclaimed Property Laws and Uniform Acts

Every state has a law regulating “unclaimed” property—that

is, property held by another for an owner who has left it unattended,

who is unknown to the holder, or who cannot be found. See

Uniform Law Commission, Revised Uniform Unclaimed Property

Act, Prefatory Note, at 1, 3 n.8 (2016) (“RUUPA”). Unclaimed

property can be a “drag on the economy,” Cerajeski v. Zoeller, 735

F.3d 577, 579 (7th Cir. 2013), and, if left unregulated, results in

windfalls to the banks and other people and entities who have the

good fortune to hold it, see Comptroller of Treasury v. PHH Corp.,

123 Md. App. 214, 218 (1998).

Most of the state laws that address this problem are based on

a series of uniform acts published by the Uniform Law

Commission (“ULC”).13 American Express Travel Related Servs.,

Inc., v. Sidamon-Eristoff, 669 F.3d 359, 365 (3d Cir. 2012);

RUUPA, Prefatory Note, at 1. In 1954, the ULC published the first

of these uniform acts, called the Uniform Disposition of Unclaimed

Property Act. RUUPA, Prefatory Note, at 1. Maryland’s Act

draws heavily from this first version, as discussed later. See infra

Part I.C. Revisions to the uniform act followed under various

13

The ULC is “also known as the National Conference of

Commissioners on Uniform State Laws.” Uniform Law Comm’n,

https://www.uniformlaws.org/home (last visited Apr. 25, 2023).

Gen. 21] 31

names in 1966, 1981, 1995, and, most recently, in 2016. RUUPA,

Prefatory Note, at 1. The uniform acts have a dual purpose: first,

to protect property owners by creating a system for reuniting them

with their property; and second, to transfer the windfall of

unclaimed property to the state, so that it may be used for public

benefit when the owners cannot be found. Id. at 3; Uniform

Disposition of Unclaimed Property Act, Prefatory Note, at 2 (1954)

(“1954 Uniform Act”).

The uniform acts and the state unclaimed property laws based

upon them descend from the common law tradition of escheat,

under which the crown acquired title to the lands of a person who

died without heirs. Clymer v. Summit Bancorp, 171 N.J. 57, 62-63

(2002). But most unclaimed property laws do not, in fact, provide

for escheat. Commonwealth Edison Co. v. Vega, 174 F.3d 870, 872

(7th Cir. 1999); RUUPA, Prefatory Note, at 1. That is, under these

laws, the state does not acquire ownership of unclaimed property

but instead holds it as a custodian for the owner. Id. The owner

may claim it at any time; in most states, no limitations period

applies. Vega, 174 F.3d at 872 (noting that a state “does not acquire

title” but is “merely a custodian,” and “[t]he owner can reclaim his

property at any time”); RUUPA, Prefatory Note, at 2 (“The state

merely holds possession, indefinitely . . . .”); 1954 Uniform Act,

Prefatory Note, at 2 (“The state takes custody and remains the

custodian in perpetuity.”).

Until the owner claims the property, the state uses it. It sells

everything other than money and deposits the proceeds in the state

treasury, holding a certain threshold in reserve to pay claims. See,

e.g., Hall v. State, 908 N.W.2d 345, 351 (Minn. 2018); RUUPA

§ 701. A state’s possession of unclaimed property thus works like

a “loan to the state—in perpetuity if the owner never shows up to

claim it.” Vega, 174 F.3d at 872. Some authorities thus refer to

unclaimed property laws as “‘modern’ escheat statutes,” e.g.,

Employers Ins. of Wausau v. Smith, 154 Wis. 2d 199, 205 (1990),

or “custodial escheat” statutes, e.g., Sidamon-Eristoff, 669 F.3d at

365; Colo. Op. Att’y Gen. No. 2005-01, 2005 WL 4020083, at *3

(Apr. 13, 2005).

Strictly speaking, state laws based on the uniform acts focus

on the regulation of unclaimed rather than “abandoned” property.

See RUUPA, Prefatory Note, at 3 n.8 (distinguishing terms); cf.

§ 201 (referring to property that is “presumed abandoned”).

Abandoned property is a more specific concept that refers to the

“voluntary relinquishment or renunciation of a property right, or an

ownership vacuum resulting from the owner’s death without heirs

32 [108 Op. Att’y

or a valid will.” Cerajeski, 735 F.3d at 581. Put differently,

abandoned property is a subset of unclaimed property. RUUPA,

Prefatory Note, at 3 n.8 (“All abandoned property is also

unclaimed, but not all unclaimed property is abandoned.”).

Unclaimed property laws work by applying a presumption of

abandonment to property that goes unclaimed for a set number of

years known as a “dormancy period.” See Clymer, 171 N.J. at 59;

PHH Corp., 123 Md. App. at 218. For example, under the current

uniform act, traveler’s checks are presumed abandoned if left

unclaimed for a dormancy period of fifteen years. RUUPA

§ 201(1). Dormancy periods vary by property type. The 1954

uniform act set them at seven years for most types of personal

property, including bank accounts and sums payable on uncashed

checks. 1954 Uniform Act § 2(a), (c). These periods have become

shorter over time; they settled at three years under the 1995 uniform

act and remain at that length for most property types under the 2016

uniform act. RUUPA § 201 cmt. There are exceptions, such as for

wages (one year) or for the aforementioned traveler’s checks

(fifteen years). RUUPA § 201(1), (11).

Even after the dormancy period has run, the holder must

attempt to contact the owner before treating property as abandoned.

For example, in Maryland, the holder must in most circumstances

send a notice by first-class mail to the owner stating that, if the

owner does not respond within 30 days, the property “will be

considered abandoned.” Md. Code Ann., Com. Law (“CL”)

§ 17-308.2. If that does not work, the holder must report and

transfer the property to the administrator of the State’s unclaimed

property fund. See Sidamon-Eristoff, 669 F.3d at 365. The State

then attempts to locate the owner, usually by publishing

information about the property in its custody. See, e.g., Immanuel

v. Comptroller of Maryland, 449 Md. 76, 82-83 (2016).

The ULC has updated its uniform acts over the years to

address new forms of tax-advantaged property. In 1981, it

fashioned a rule for IRAs providing that the dormancy period for

them would not be triggered until distributions from the account

became mandatory. Uniform Unclaimed Property Act § 12(b)

(1981).14 Distributions from IRAs become mandatory only beyond

14

Congress first authorized tax-advantaged IRAs in the Employee

Retirement Income Security Act (“ERISA”) of 1974, Mazzei v.

Commissioner of Internal Rev., 998 F.3d 1041, 1044 (9th Cir. 2021), and

first authorized 401(k) defined contribution retirement accounts in 1981,

Gen. 21] 33

the typical age for retirement. See IRS Pub. 590-B, at 7, 35 (noting

that, generally, minimum distributions become mandatory for

traditional IRAs by April 1 of the year following the year in which

the owner reaches age 72 and do not become mandatory for Roth

IRAs until after the owner’s death). As such, under the 1981

uniform act, these savings vehicles for retirement could not be

presumed abandoned before the typical age for retirement—i.e., the

age at which the intended use for the funds would typically arise—

not even if the owner left them to grow unattended in the meantime.

The uniform laws continue to treat IRAs and other retirement

accounts in essentially this fashion, with some added safeguards.

RUUPA § 202.15

The 2016 uniform act addresses 529 accounts. Stakeholders

debated the topic for years before publication, especially with

respect to college savings plans. One interest group recommended

exempting them entirely. Unclaimed Property Professionals

see Edward A. Zelinsky, The Defined Contribution Paradigm, 114 Yale

L. J. 451, 489 (2004). Although individual tax-advantaged retirement

accounts apparently did exist in some limited forms before ERISA, see

id. at 471 (mentioning nonprofit employee accounts), the ULC did not

address such accounts in the uniform acts until the 1981 revision, see

Uniform Unclaimed Property Act § 12(b) (1981).

15

For employer-sponsored retirement plans such as 401(k) or pension

plans, courts have held that ERISA preempts state unclaimed property

laws to the extent that they require such plans to transfer assets to the

state. Vega, 174 F.3d at 873-74; Manufacturers Life Ins. Co. v. East Bay

Rest. & Tavern Ret. Plan, 57 F. Supp. 2d 921, 924-25 (N.D. Cal. 1999);

see also U.S. Dep’t of Labor, Advisory Opinion 1994-41A, 1994 WL

694828 (Dec. 7, 1994). But see RUUPA § 202 cmt (suggesting that these

rulings may apply only to employer pension plans, not defined

contribution plans such as 401(k) plans). Governmental retirement plans

raise different issues because, although employer-sponsored, they are not

subject to ERISA. E.g., Gualandi v. Adams, 385 F.3d. 236, 242 (2d Cir.

2004). Some states appear to use alternative mechanisms, rather than

their general systems for unclaimed property, to regulate unclaimed

funds in governmental retirement plans. See Or. Op. Att’y Gen. No.

6019, 1965 WL 98740, at *1-2 (Sept. 1, 1965) (concluding that Oregon’s

unclaimed property law did not apply to a state employees’ retirement

system governed by a more specific statutory mechanism for addressing

unclaimed funds in the system); see also Samuel Schaunaman et al.,

Unclaimed Property and Employee Benefits: What Businesses Need to

Know, 23 J. Multistate Tax’n 30, 32 (2013) (noting that some states allow

employee benefit plans to opt out of the abandoned property system by

providing in the plan documents for “a method for the treatment of the

account balance of the account holder, plan participant, or beneficiary

who cannot be located”).

34 [108 Op. Att’y

Organization, Recommendations to ULC, at 1, 25 (June 18, 2014)

(“UPPO Recommendations”). The Investment Company Institute,

which represents mutual funds and other investment funds, argued

for a thirty-year dormancy period. National Association of

Unclaimed Property Administrators, Recommendations to ULC, at

B-3.12 (Oct. 29, 2014) (quoting recommendation). It considered

this period appropriate due to the “nature and purpose of such

accounts and the severe tax consequences and penalties that would

result from their premature escheatment.” Id. Finally, the National

Association of Unclaimed Property Administrators, which

represents the state agencies that enforce unclaimed property laws,

countered that such a long dormancy period would be “arbitrary

and [would] unnecessarily delay[] escheatment.” Id. It suggested

instead a rule under which accounts could not be presumed

abandoned before the beneficiary turned 26. RUUPA Reporter,

Compilation of Recommendations and Suggestions for Revision

Submitted by Stakeholders, at 23 (undated).

In the end, the ULC mostly followed the proposal of the

Investment Company Institute. For college savings accounts, the

2016 uniform act uses a three-year dormancy period that does not

begin to run until thirty years after the account is opened. RUUPA

§ 203 cmt.16 The ULC explained that it had determined that college

savings accounts “may well be used by beneficiaries over a longer

period of time and that, as a consequence, a policy allowing for up

to thirty years before those accounts would be surrendered to the

states was prudent and favored consumers.” Id. As for ABLE

accounts, the 2016 uniform act exempts them entirely, RUUPA

§ 203, due to their “nature and purpose,” id. cmt.17

16

The dormancy period may also be triggered when distributions

from an account become mandatory under federal tax law, see RUUPA

§ 203(1), but that situation does not apply to 529 accounts. Compare 26

U.S.C. § 529(c)(3) (not requiring distributions within any time horizon),

with id. § 530(b)(1)(E) (generally requiring that Coverdell education

savings accounts be fully distributed 30 days after beneficiary turns 30).

17

Some states have enacted laws that follow these aspects of the

uniform act. See Uniform Law Comm’n, Map, https://www.uniformlaws

.org/committees/community-home?CommunityKey=4b7c796a-f158-47bc-b

5b1-f3f9a6e404fa (last visited Apr. 28, 2023) (showing enactment of the

2016 revised act by ten states and the District of Columbia); e.g., Colo.

Rev. Stat. Ann. §§ 38-13-102(24)(c)(I), 38-13-203. A few other states

expressly address unclaimed 529 accounts in statutes that are not based

on the uniform act but that typically use similar approaches—essentially,

specialized rules under which the presumption of abandonment cannot

arise until after the point that a beneficiary would likely have intended to

Gen. 21] 35

C. Maryland’s Abandoned Property Act

The General Assembly enacted the Abandoned Property Act

in 1966. 1966 Md. Laws, ch. 611.18 The Act drew heavily from,

and remains substantially based upon, the 1954 uniform act. See

PHH Corp., 123 Md. App. at 218. The General Assembly has, of

course, amended the statute over the years. To list a few examples,

it has (over time) shortened the dormancy period that applies to

most property types from fifteen years to the now-standard three

years. See 2002 Md. Laws, ch. 440. It added a subtitle about

property in federal custody. 1981 Md. Laws, ch. 752 (adding

subtitle 2, CL §§ 17-201 to 17-209). It also joined a minority of

states in enacting so-called “business to business” or “B2B”

exemptions, so that the Act does not cover many checks, credits, or

transactions between businesses. E.g., 1997 Md. Laws, ch. 732;

see CL § 17-101(m)(2)-(4) (current B2B exemptions); see

generally RUUPA, Prefatory Note, at 10. And last year, it

amended the provisions that govern bank accounts, other property

held by financial institutions, and stocks and dividends to provide

that such property is not presumed abandoned unless the holder

lacks a valid address for the owner. 2022 Md. Laws, ch. 648 (H.B.

305).

But many of the Act’s core provisions still hew closely to their

analogues from the 1954 uniform act, albeit with updated

dormancy periods. Compare, e.g., CL § 17-306 (property held by

fiduciaries), § 17-307 (property held by public entities), with 1954

Uniform Act §§ 7-8. The Act does not contain provisions

addressing retirement accounts, 529 accounts, or other types of tax-

advantaged property—although, as discussed later, the

Comptroller has issued a regulation on IRAs. COMAR

03.05.01.06; see infra Part II.A.5.

use the benefits. E.g., La. Rev. Stat. § 9:154A(15)(a) (five-year dormancy

period cannot begin until beneficiary’s thirty-fifth birthday); Ala. Code

§§ 16-33C-7(c), 16-33C-11(a)(10) (presumption of abandonment applies

if property still unclaimed upon expiration of benefits period); cf. Fl. Stat.

Ann. § 1009.972(5) (if prepaid benefits remain unclaimed after

expiration of benefits period and an additional dormancy period, they

transfer to scholarship programs). We are not aware of any state statutes

that explicitly subject 529 plans to generally applicable dormancy

periods for non-tax advantaged property.

18

Until 1981, the Maryland Act had the same title as the uniform

laws. See 1981 Md. Laws, ch. 752 (amending what is now CL § 17-326

to change the title of the act from the “Uniform Disposition of Unclaimed

Property Act” to the “Uniform Disposition of Abandoned Property

Act”).

36 [108 Op. Att’y

Like the laws of some other states, the Act uses the term

“abandoned property” in place of “unclaimed property.” CL

§ 17-101(b)(2) (defining “abandoned property” to include property

in federal custody that “is classified as ‘unclaimed property’ under

federal law”).19 The Comptroller administers the Act and must

initiate the sale of property (other than money) received under it

within a year. Id. §§ 17-101(c), 17-316(a). The Act directs the

Comptroller to distribute the sale proceeds and other monies

received under the Act across specified funds in the State

Treasury—for example, $8,000,000 to the Maryland Legal

Services Corporation Fund; $14,000,000 to the Access to Counsel

in Evidence Special Fund in fiscal year 2024—with the remainder

going to the General Fund. CL § 17-317(a). The Comptroller must

reserve $50,000 to pay claims. Id. (a)(1)(ii).

II

Analysis

A. Whether the Abandoned Property Act Applies to 529

Accounts

The principal question here, whether the Abandoned Property

Act applies to 529 accounts in the Maryland programs, is one of

statutory interpretation that turns upon legislative intent. E.g.,

Immanuel, 449 Md. at 86. The “normal, plain meaning of the

language of the statute” is the chief indicator of the General

Assembly’s intent. Wheeling v. Selene Finance LP, 473 Md. 356,

376 (2021). If the statutory language is “clear and unambiguous,”

the interpretive inquiry generally ends there. Dejarnette v. State,

478 Md. 148, 162 (2022); Immanuel, 449 Md. at 86. If the statutory

language is ambiguous, however, we must consider other

indicators of legislative intent, including context, the purpose of the

statutes, the consequences of plausible interpretations, and

legislative history. Wheeling, 473 Md. at 377; Mayor & Town

Council of Oakland v. Mayor & Town Council of Mountain Lake

Park, 392 Md. 301, 316 (2006). The Maryland courts have also

explained that “an ambiguity may still exist” in statutory language

“even when the words of the statute are themselves ‘crystal clear,’”

if the statute’s “application in a given situation is not clear.” Blind

Indus. & Servs. of Maryland v. Maryland Dep’t of Gen. Servs., 371

Md. 221, 231-32 (2002). In other words, the “intrinsic meaning [of

statutory language] may be fairly clear, but its application to a

19

In this opinion, we use “unclaimed property” when referring

generally to the field of unclaimed property law and “abandoned

property” when referring to the Maryland Act.

Gen. 21] 37

particular object or circumstance may be uncertain.” Id. at 232

(quoting Gardner v. State, 344 Md. 642, 649 (1997)).

Before applying these principles, we emphasize that this is a

novel question of law. Unclaimed property laws and 529 programs

coexist in nearly every state, and the policy question of how they

should fit together has prompted much debate. The uniform act’s

proposed thirty-year trigger period for college savings plans and

exemption for ABLE programs emerged from that debate. But we

know of no published court decision or administrative

determination that analyzes whether an unclaimed property law

that has not been updated to address 529 accounts nonetheless

applies to them. Some sources indicate that agencies in other states

have confronted the issue, see, e.g., UPPO Recommendations at 25

(describing determinations of Ohio and Connecticut agencies that

unclaimed property laws do not apply to 529 assets), but we have

not found published legal analysis explaining their decisions.20

In addressing this question, we are also mindful of this

novelty and of our obligation to hew to current State law while

leaving resolution of the burgeoning policy issue to the General

Assembly. See 77 Opinions of the Attorney General 188, 190

(1992); 76 Opinions of the Attorney General 3, 3 (1991).

Ultimately, as we will explain, we do not think the General

Assembly intended the Abandoned Property Act to apply to 529

accounts when it enacted the three 529 programs.

We start, as always, with the text of the statute. But, in our

opinion, the statutory text here does not resolve the question. To

20

Disclosure documents for 529 programs, including Maryland’s

programs, often reference unclaimed property laws in general language

that does not, in our opinion, convey a clear conclusion about whether

the laws apply to the accounts. See MCIP Discl. at 29 (“Under certain

circumstances, if there has been no activity in your Account and we have

not been able to contact you for a period of at least three years, your

Account may be considered abandoned under State law.”); ABLE Discl.

at 43 (“Many states (including Maryland) have unclaimed property laws

or similar laws under which if certain statutory requirements are met,

funds in an account may be considered abandoned or unclaimed. Your

state may request that the Program transfer the funds in your ABLE

Account pursuant to such laws.”). The ABLE disclosure document does

state that impermissible contributions in excess of statutory caps will be

treated as abandoned property if not claimed by the contributor. ABLE

Discl. at 15. In any event, because your questions concern 529 accounts,

we do not address whether these moneys that are prohibited from

entering 529 accounts are subject to the Abandoned Property Act.

38 [108 Op. Att’y

be sure, several provisions of the Abandoned Property Act are

worded broadly enough to implicate college and disability savings

plans. Perhaps the most relevant provision is CL § 17-306, which

concerns property held by fiduciaries:

All intangible personal property and any

income or increment on it, held in a fiduciary

capacity for the benefit of another person, is

presumed abandoned unless, within 3 years

after it becomes payable or distributable, the

owner has increased or decreased the

principal, accepted payment of principal or

income, corresponded in writing concerning

the property, or otherwise indicated an interest

as evidenced by a memorandum on file with

the fiduciary.

Investment accounts such as 529 accounts constitute “intangible

personal property” for purposes of the Abandoned Property Act.

See 1954 Uniform Act § 9 cmt. (explaining that “a wide variety of

items will be embraced under” a section applicable to intangible

personal property, including “money, stocks, bonds, certificates of

membership in corporations, securities, bills of exchange, deposits,

interest, dividends, income”). At first blush, then, it appears

plausible that this provision governs 529 accounts. The accounts

are, after all, “intangible personal property . . . held in a fiduciary

capacity” by the 529 Board for the benefit of account holders and

beneficiaries. CL § 17-306. Indeed, given that the fiduciary nature

of the Board’s oversight anchors the 529 programs, § 17-306

speaks to an essential feature of 529 accounts. See Educ.

§ 18-1907(a) (labelling Board members as “fiduciaries”); supra

Part I.A (discussing fiduciary aspects of programs).

At least two other provisions of the Act are also worded

broadly enough to arguably apply to 529 accounts. Section 17-307

covers all intangible personal property held by public entities:

All intangible personal property held for the

owner by any court, public corporation, public

authority, or public officer of this State or any

political subdivision of it that has remained

unclaimed by the owner for more than 3 years

is presumed abandoned.

Gen. 21] 39

CL § 17-307. Even more broadly, the so-called “omnibus section”

of the Act purports to cover all types of intangible personal

property not covered by other sections:

All intangible personal property, not

otherwise covered by this title, including any

income or increment on it and deducting any

lawful charges, that is held or owing in the

ordinary course of the holder’s business and

has remained unclaimed by the owner for

more than 3 years after it became payable or

distributable, is presumed abandoned.

CL § 17-308(b); 1954 Uniform Act § 9 cmt. (explaining that the

omnibus section aims to cover “all other intangible personal

property not otherwise covered by the more specific provisions of

the Act”); see also CL § 17-101(i), (l) (defining “holder” to include

a “person” and defining “person” to include the State and its units).

Again, because 529 accounts constitute intangible personal

property, it appears plausible, on an initial read, that one of these

provisions could apply to the accounts.21

Despite their wide sweep, however, these provisions become

ambiguous when applied to the unique features of 529 accounts.

See Blind Indus. & Servs. of Maryland, 371 Md. at 231-32. As the

Court of Appeals—now called the Supreme Court of Maryland—

explained in a case concerning the interplay between the

Abandoned Property Act and the Public Information Act, statutory

language that appears clear on its face may become ambiguous

when read in conjunction with another statutory scheme, especially

when, as here, the relationship between the statutes is not “plainly

set out” in the text and where the acts do not “refer[] directly to

each other.” Immanuel, 449 Md. at 87; see also 107 Opinions of

the Attorney General 74, 86-87 (2022) (concluding that statutory

language that appeared clear in isolation became ambiguous upon

consideration of how it would interact with other laws governing

the same subject).

21

The broad wording of the Act’s fiduciary, public entities, and

omnibus provisions is a hallmark of unclaimed property laws. It is

common for one type of property to fall within the potential sweep of

various provisions. See, e.g., Cory v. Public Utilities Comm’n, 33 Cal.

3d 522, 526 (1983) (unclaimed telephone refunds could fall under either

of two provisions); Weisman v. Brunetti, 15 N.J. Tax 197, 200-01 (N.J.

App. 1995) (per curiam) (multiple provisions “possibly could apply” to

unclaimed rent refunds); In re Northeast Utilities, 479 F. Supp. 194, 198

(D. Conn. 1979) (similar for unclaimed shares in public utility).

40 [108 Op. Att’y

Indeed, our Office has also recognized that seemingly clear

language on the face of the Abandoned Property Act may require

additional scrutiny to resolve tensions with other statutes. More

specifically, in examining a question about unclaimed lottery

prizes, we quoted broad language in the Act that would have

appeared, on its face, to cover them. See Md. Op. Att’y Gen. No.

86-026, 1986 WL 289921, at *2 (Apr. 9, 1986) (unpublished). Yet

we ultimately concluded that the Act did not apply to unclaimed

prizes because a section of the State Government Article provided

that the State Lottery Agency should retain them to fund future

prizes. Id. To require the transfer of unclaimed lottery prizes to

the Comptroller under the Abandoned Property Act, we reasoned,

would have “utterly defeat[ed]” the more specific mandate in the

State Government Article. Id. at *2 n.4. In short, even when

language of the Abandoned Property Act may appear in isolation

to subject a particular type of property to its mandates, the

ambiguities that arise in application and in reading the Act together

with other statutes often require additional scrutiny. See 107

Opinions of the Attorney General at 86-87.

Here, there are at least three significant ambiguities that arise

when attempting to read the Abandoned Property Act in

conjunction with the statutes governing the 529 programs. First,

the Act’s provisions do not fit comfortably with the distinction

drawn in the college savings plans between account holders and

beneficiaries. Under the plain language of the Abandoned Property

Act, a Prepaid Trust or Investment Plan account’s owner—that is,

the person whose actions with respect to the account suffice to

forestall dormancy and, ultimately, a presumption of

abandonment—would be the account’s beneficiary. CL

§ 17-101(k) (“‘Owner’ means . . . [i]n the case of a trust, a

beneficiary . . . .”). But, as we have seen, the beneficiary does not

interface with Maryland 529 or control the account; the account

holder does. See In re Olchowski, 485 Mass. 807, 816-17 (2020)

(reasoning that application of Massachusetts abandoned property

law to attorney trust accounts would “be the legal equivalent of

trying to fit a square peg into a round hole,” in part because the

statute would appear to treat the attorney rather than the client as

the “owner” of deposits).

One might seek an interpretive solution to this problem by

resorting to less specific language in the Abandoned Property Act’s

definition of owner that points toward the account holder instead

of the beneficiary. See CL § 17-101(k)(5) (defining “owner” to

include “[a]ny person who has a legal or equitable interest in

property subject to this title”). But see State v. Ghajari, 346 Md.

Gen. 21] 41

101, 116 (1997) (the specific prevails over the general in statutory

interpretation). Still, the poor fit is apparent. None of the

provisions of the Act that might govern 529 accounts speaks to the

distinction between account holders and beneficiaries. In contrast,

other provisions of the Act do acknowledge special layers of

ownership interests in specific types of intangible property, see,

e.g., CL § 17-302(b) (addressing the situation where “a person

other than the insured or annuitant is entitled to the funds” on an

insurance or annuity contract), and the unclaimed property laws of

other states that have been updated to apply to 529 accounts

specifically address the distinction between account holders and

beneficiaries, see, e.g., Ala. Code § 16-33C-7(c);22 see also

RUUPA § 102 cmt. (clarifying that “for bank accounts, brokerage

accounts, IRAs, and other similar property, the legal owner of the

account would take precedence over a named beneficiary who does

not yet have legal ownership of the account”).

Second, the text of the Abandoned Property Act provisions

does not map logically onto the tax-advantaged framework of the

three 529 programs, which allows funds to be used without penalty

only for education or disability expenses. Under the Abandoned

Property Act provisions that might arguably apply to 529 accounts,

intangible property is presumed abandoned if the owner takes no

action for three years with respect to funds that are available to him

or her. For example, the public entities provision states that

intangible property is presumed abandoned if it is “held for the

owner” by a public entity and “has remained unclaimed by the

owner for more than 3 years.” CL § 17-307. Similarly, under the

fiduciary and omnibus provisions, the presumption of

abandonment applies when the owner leaves property unattended

for three years after it becomes “payable or distributable.” CL

§§ 17-306, 17-308(b); see also § 17-308(c) (“Property is payable

or distributable for the purpose of this title notwithstanding the

owner’s failure to make demand or to present any instrument or

document required to receive payment.”).

22

The statute reads: “A [prepaid] contract shall also specifically

provide that, if after ten years following the designated beneficiary’s

college entrance date or the actual entrance date of a designated

beneficiary who is an accelerated student, neither the [prepaid] contract

has been terminated nor the designated beneficiary’s rights under the

contract exercised, the [] board, after making reasonable effort to locate

the purchaser, shall presume the contract purchase amount unclaimed

and abandoned property, and thereafter administered in accordance with

the Alabama Uniform Disposition of Unclaimed Property Act . . . .” Ala.

Code § 16-33C-7(c) (emphases added).

42 [108 Op. Att’y

These provisions are in tension with the nature of 529 account

distributions, which the account owner may initiate at any time but

which will be subject to tax penalties if the funds are not put toward

a qualifying education or disability expense. For example, if we

were to apply the fiduciary provision—which, on its face at least,

is perhaps the most likely to apply in this context—529 accounts

would appear to be “distributable” from the moment the account

owner places funds in them, because the 529 statutes allow the

account holder to initiate a “distribution” at any time. See

Merriam-Webster Dictionary, https://www.merriam-webster.com/

dictionary/distributable (last visited Sept. 23, 2022) (defining

“distributable” to mean “capable of being distributed”); supra Part

I.A (discussing 529 distribution rules).23 Yet unless the account

holder has already accrued qualifying expenses to apply the funds

against (i.e., unless the beneficiary has enrolled in a qualifying

school or accumulated disability expenses), generally the

distribution will be penalized.

In short, the text of the Act, read in isolation, would appear to

treat funds in 529 accounts as available to the account holder, and

thus subject to the generally applicable three-year dormancy

period, even when distribution of the funds would trigger tax

penalties. Whereas RUUPA and the unclaimed property laws of

many other states address this problem, the Maryland Act does not.

See RUUPA § 203 (dormancy period for 529 and other tax-

advantaged accounts begins to run thirty years after the account is

opened or “the date, if determinable by the holder” when

distributions become mandatory, whichever is earlier).

Third, the provisions of the 529 enabling statutes that seek to

protect 529 funds from the State add further ambiguity. As

mentioned earlier, each of the three enabling statutes contains a

provision that states as follows: “Money of the [program] may not

be considered money of the State and may not be deposited” into

the State Treasury. E.g., Educ. § 18-1903(f). Because the

Abandoned Property Act requires the Comptroller to liquidate

presumptively abandoned property and deposit the sale proceeds

into specified Treasury accounts within one year of receipt, CL

§§ 17-316, 17-317, there is again some tension between the Act’s

requirements and the 529 statutes.

23

As discussed later, we have considered whether the phrase “payable

or distributable” might reasonably be interpreted to trigger the dormancy

period for 529 accounts only after some threshold event, such as if the

account is terminated. We do not think so. See infra Part II.B.5.

Gen. 21] 43

To be sure, the language in the 529 statutes does not explicitly

exempt the accounts from the Abandoned Property Act, cf. Educ.

§ 18-1911 (exempting Prepaid Trust from the Insurance Article),

nor create a conflicting mechanism for dealing with unclaimed

accounts, cf. Md. Op. Att’y Gen. No. 86-026, 1986 WL 289921, at

*2 n.4. And even though the Comptroller deposits sale proceeds

into the State Treasury, the Comptroller has a custodial

responsibility to safeguard and return the value of presumptively

abandoned property to the owner upon demand. CL §§ 17-313,

17-319. Still, the care that the enabling statutes take in seeking to

wall off 529 funds from the State Treasury reinforces the ambiguity

about whether the Legislature intended the Abandoned Property

Act to apply. See Immanuel, 449 Md. at 87 (finding the text of the

Abandoned Property Act ambiguous where it and another relevant

statute did “not plainly set out” their interplay and where “[n]either

of the acts refer[ed] directly to the other”).

Having found no “clear and unambiguous” answer in the

statutory text, we consider the surrounding context, the

consequences of potential interpretations, the purpose of the

relevant statutes, and the legislative history to determine whether

the General Assembly intended the Abandoned Property Act to

apply to 529 accounts. See Mayor & Town Council of Oakland,

392 Md. at 316. These considerations, in our view, establish that

the General Assembly did not so intend.

1. Context

Beginning with context, the Act’s three-year dormancy period

does not match the nature of the 529 programs. The tax advantages

of the programs—in particular the possibility of tax-free

earnings—incentivize (although do not require) people to invest

money far in advance of expected education and disability

expenses. See supra Part I.A. The programs also allow for

extended gaps between initial investment and benefits use. Prepaid

Trust accounts are available at birth, and the benefits period

extends until at least ten years after the beneficiary’s projected

college enrollment date. MPCT Discl. at 10, 25. ABLE accounts

are available at birth and are designed for people who by age 26

have disabilities or blindness; distributions, meanwhile, may be

used for qualifying expenses even after the beneficiary’s death.

ABLE Discl. at 3, 7. And Investment Plan accounts are available

even before a child’s birth—apparently by way of parents who

name themselves as initial beneficiaries before the birth. Maryland

529, New and Expectant Parents, https://maryland529.com/529-

Basics/For-Every-Saver/New-and-Expectant-Parents (last visited

44 [108 Op. Att’y

May 2, 2023). The funds then remain available for education

expenses anytime during the child’s life and can be transferred to

relatives even after that. MCIP Discl. at 27-28.

In sum, the framework of each 529 program—the tax

advantages and the extended lifecycles for accounts—encourages

people to invest early to cover expenses that may not arise for

decades. This framework clashes with the three-year dormancy

period in the relevant provisions of the Abandoned Property Act.

Under any of the provisions that might apply to 529 accounts,

Maryland 529 would be required to transfer the accounts to the

Comptroller after three years of inactivity if unable to contact the

owners.24 This inconsistency, in our view, suggests that the

General Assembly did not intend the Abandoned Property Act to

apply to the accounts. See Blind Indus. & Servs. of Maryland, 371

Md. at 236 (declining to give an ambiguous statute an interpretation

that would have “an adverse impact on the goals of” another

statute).

Granted, the tension between the nature of the 529 accounts

and the Abandoned Property Act does not amount to the type of

blatant statutory conflict that led us to conclude, in a prior opinion,

that the Act does not apply to lottery winnings. See Md. Op. Att’y

Gen. No. 86-026, 1986 WL 289921, at *2 n.4. Yet when

legislatures in other jurisdictions have intended unclaimed property

laws to apply to 529 accounts, they have tailored much longer

dormancy periods—typically, thirty years—to fit the long-term

nature of the accounts and thus avoid the clash that application of

the Maryland Act to 529 accounts would entail. See, e.g., Colo.

24

As already mentioned, unclaimed property laws generally require

the holder to attempt to notify the owner before transferring property to

an unclaimed property fund. See supra Part I.B. Under the provisions

of the Maryland Act that might apply to 529 accounts, the required notice

must be by first-class mail. CL § 17-308.2. This notice requirement,

while integral to the statutory scheme, is not a failsafe. See Hearing on

H.B. 882 Before the House Economic Matters Comm., 2020 Leg., Reg.

Sess., at 1-2 (Mar. 6, 2020) (written testimony of Del. Kerr, bill sponsor,

discussing instances where notice failed to prevent the transfer of

financial accounts that owners intended to leave undisturbed); see also

2022 Md. Laws, ch. 648 (H.B. 305) (addressing notice concerns by

amending the Abandoned Property Act provisions for banks and

financial organizations to provide that the dormancy period does not

begin unless the holder lacks a valid address for the owner); RUUPA

§§ 203, 501 (imposing notice-by-mail requirement but still using a

special 30-year trigger period for tax-advantaged college savings

accounts).

Gen. 21] 45

Rev. Stat. Ann. § 38-13-203 (following RUUPA 30-year dormancy

period).

2. Consequences

Application of the Abandoned Property Act to 529 accounts

would also have illogical consequences. Although property owners

may claim their abandoned property from the Comptroller at any

time, CL § 17-318, a 529 account holder who recovers funds from

the Comptroller following a transfer under the Act would often owe

income taxes and penalties on the earnings portion of the account,

26 U.S.C. § 529(c)(3)(A) (rendering distributions from college

savings plans for non-qualified expenses taxable unless an

exception applies); id. § 529A(c)(1)(A) (same for ABLE); cf. IRS

Rev. Rul. 18-17, 2018-25 I.R.B. 753 (treating transfers of IRA

assets to unclaimed property funds as “distributions” for purposes

of Internal Revenue Code reporting and withholding

requirements); IRS Rev. Rul. 20-24, 2020-45 I.R.B. 965 (similar

analysis for transfers from qualified retirement plans under 26

U.S.C. § 401(a)).

Account holders could avoid these negative tax consequences

only in narrow circumstances. For example, if by coincidence the

beneficiary happened to have qualifying education or disability

expenses in the relevant tax year, the account holder could count

those expenses against the recovered funds. See 26 U.S.C.

§ 529(c)(3)(B)(ii). Or, in the unlikely event that the account holder

recovers the funds within sixty days of the transfer to the

Comptroller, he or she could roll them over into a new 529 account

without suffering tax consequences. Id. § 529(c)(3)(C)(i).25

25

In the case of retirement accounts, the IRS has issued guidance

permitting waivers of the sixty-day rollover deadline for funds that have

been distributed to a state unclaimed property administrator. IRS Rev.

Proc. 20-46, 2020-45 I.R.B. 995. The IRS has not made the same type

of waiver available for 529 accounts, and it is not clear that the IRS

would have authority to do so. Compare 26 U.S.C. § 408(d)(3)(I)

(authorizing the IRS to waive the deadline for individual retirement

accounts where the failure to do so “would be against equity or good

conscience”), with id. § 529(c)(3)(C)(i) (no waiver language for college

savings accounts), and § 529A(c) (same for ABLE accounts). But even

if the IRS were to authorize such a waiver in the future, the point would

remain that, under the tax laws as they existed when the General

Assembly created each of the 529 programs, application of the

Abandoned Property Act would have triggered illogical tax

consequences and would thus have constituted a result that the General

46 [108 Op. Att’y

Otherwise, account holders or their beneficiaries would be left to

pay taxes and penalties on earnings from an account that they set

up specifically because its earnings were meant to be tax-free. See

id. § 529(c)(3).

In addition, funds remaining after the tax bill could not be

restored to their original tax advantages, at least not fully. The

account would not enjoy tax-free appreciation during its period in

the Comptroller’s custody. And given that rollovers are

unavailable after 60 days, an account holder wishing to return the

funds to a 529 program would face obstacles—either a second

round of gift tax implications in the case of a college savings

program, or the strict annual cap on contributions (currently

$17,000, plus some income) that applies to ABLE.

The upshot is that, on top of the taxes and penalties on account

earnings, the transfer of a 529 account to the Comptroller would in

many cases cause irreparable damage to an account’s tax

advantages going forward. The prospect of such illogical

consequences again suggests, in our view, that the General

Assembly did not intend the Abandoned Property Act to apply. It

is “inconsistent with common sense,” State v. Fabritz, 276 Md.

416, 422 (1975), that someone who frontloads an account and

leaves it alone for years before the time for its intended use arises—

exactly the type of behavior that the 529 programs incentivize—

could face taxes, penalties, and the loss of the core tax advantages

of the account.

3. Legislative Purpose

The legislative purpose of the Abandoned Property Act and

of the 529 enabling statutes further supports the conclusion that the

Act does not apply to 529 accounts. Recall that unclaimed property

laws like Maryland’s have two main purposes: to protect owners’

interests by reuniting them with their unclaimed property, and,

failing that, to ensure that the benefit of unclaimed property runs to

the State rather than private actors. See supra Part I.B. Of these

two purposes, the first is paramount. See Cerajeski, 735 F.3d at

583 (“[U]nclaimed property acts are primarily designed not to

enrich the state directly but to return the unclaimed property to the

stream of commerce, and to protect property owners against what’s

Assembly probably did not intend. Wheeling, 473 Md. at 376 (ultimate

goal of statutory interpretation is to “ascertain and effectuate the General

Assembly’s purpose and intent when it enacted the statute” (emphasis

added)).

Gen. 21] 47

known as lucrative silence.”) (cleaned up); Patronis v. United Ins.

Co. of America, 299 So.3d 1152, 1157 (Fl. Dist. Ct. App. 2020)

(“[U]nclaimed property laws are inherently remedial in nature and

generally understood as advancing a state’s strong interest in

protecting consumers . . . . Their raison d’être is principally to

safeguard the economic rights of consumers . . . .”). Thus,

unclaimed property laws must be interpreted to advance the

interests of consumers before the interests of the government.

Patronis, 299 So.3d at 1158; see 1954 Uniform Act, Prefatory

Note, at 2 (listing the protection of property owner interests as the

first policy purpose).

Given that the administrators of state unclaimed property

funds have unmatched expertise in reuniting owners and property,

broad construction and application of unclaimed property laws

usually comports with their paramount purpose of protecting

consumers. See Clymer, 171 N.J. at 67 (reasoning that unclaimed

property laws should be “given a liberal interpretation in favor of

the State”); Patronis, 299 So.3d at 1158 (“[T]he state is deemed the

preferred custodian of escheatable funds (versus private

companies) . . . .”); U.S. Gov’t Accountability Office, Report 19-

88, Retirement Accounts: Federal Action Needed to Clarify Tax

Treatment of Unclaimed 401(k) Plan Savings Transferred to States,

at 17 (Jan. 2019) (“GAO Unclaimed 401(k) Report”) (data showing

that unclaimed property administrators have considerable success

reuniting owners with retirement savings). But not in the case of

529 accounts under the Maryland Act. Interpreting the Act’s

generally applicable three-year dormancy period to govern these

tax-advantaged accounts would, as we have seen, disrupt long-term

savings plans and trigger negative tax consequences even for

people using the accounts exactly as intended. In other words,

application of the Act would not favor consumer interests and thus

would not align with the Act’s primary purpose.

The purpose of the 529 enabling statutes reinforces the point.

Unlike the Abandoned Property Act, the enabling statutes coalesce

around a single purpose: to make education and disability expenses

more affordable by providing for prepayment or tax-advantaged

savings. Each of the three statutes articulates this purpose

explicitly. Educ. § 18-1902 (Prepaid Trust seeks to “enhance the

accessibility and affordability of higher education”); § 18-19A-

02(b) (purpose of Investment Plan is to “allow contributions to an

investment account established for the purposes of meeting []

qualified higher education expenses”); § 18-19C-02(b)(1) (purpose

of ABLE program is to “[e]ncourage and assist individuals and

families in saving private funds to support individuals with

48 [108 Op. Att’y

disabilities” and “[p]rovide secure funding for disability-related

expenses”).

The statutes guard this purpose in various ways: by imposing

fiduciary obligations on the Board and agency employees,

§ 18-1907; prohibiting distributions except at the account holder’s

request, see infra Part II.B.1; and, of course, walling off the

programs’ funds from the State Treasury, e.g., Educ.

§ 18-19A-05(c). In other words, the statutes aim not merely to help

people meet the challenge of paying for education and disability

expenses, but also to safeguard this objective by ensuring that

nobody but the account holder may divert account funds to any

other purpose. We think it implausible that the General Assembly

intended accounts in programs created with such a unitary focus on

long-term savings for onerous expenses to be subject to a three-

year dormancy period capable of triggering a presumption of

abandonment (with resulting tax losses and impairments to the

savings vehicle) long before some account holders might

reasonably intend to use funds. See Blind Indus. & Servs. of

Maryland, 371 Md. at 236 (declining to interpret a statute in a

manner that would produce consequences in such “clear

contradiction” of the spirit of the statute as to make it

“inconceivable that that could have been the Legislature’s intent”).

4. Legislative History

Finally, the legislative history aligns with the view that the

Legislature did not intend the Abandoned Property Act to apply to

529 accounts. Although we have not identified any materials in the

legislative history that address this question directly, the history

confirms the General Assembly’s preoccupation with protecting

529 investments from diversion to other State uses. At the request

of a delegate, the Governor’s office proposed adding the

prohibition on Treasury deposits to the Prepaid Trust bill (the first

of the 529 enabling statutes) to “make it clear that the monies of

the program cannot be captured by the State.” Hoffman Letter.

The bill already contained language relevant to this concern—it

required the Board to manage assets “solely for purposes of” the

program and not to “use the assets for any other purpose of the

State.” S.B. 232, 1997 Leg., Reg. Sess. (First Reader). But the

General Assembly still adopted the amendment, 1997 Md. Laws,

ch. 110, and later included the same prohibition in the enabling

statutes for MCIP in 2000 and for ABLE in 2016. 2016 Md. Laws,

ch. 39; 2000 Md. Laws, ch. 494. In a similar vein, the General

Assembly built out the fiduciary provisions in the Prepaid Trust

bill: after the bill was introduced, the Senate added the language

Gen. 21] 49

that eventually became Educ. § 18-1907, imposing fiduciary

obligations on the Board and program employees, Amend. No.

889800/1, S.B. 232, 1997 Leg., Reg. Sess., at 5-7 (Senate Budget

and Taxation Comm.), and the House later supplemented these

amendments with bonding requirements for the program

fiduciaries, Amend. No. 084835/1, S.B. 232, 1997 Leg., Reg. Sess.,

at 2-3 (House Appropriations Comm.).

All of these amendments evinced the same legislative concern

as the bills wound their way through the two chambers: everyone

wanted to reinforce that the Board and its employees must act for

the benefit of account holders and beneficiaries, and that the State

must not divert 529 investments to other uses. Although none of

the resulting statutory language speaks to unclaimed property

issues and we do not think that this history by itself would be

conclusive, the concern conveyed in the legislative history with

ensuring that 529 investments would not slip away to unintended

uses comports with the conclusion we draw from context,

consequences, and legislative purpose: the General Assembly

probably did not intend to require 529 accounts to transfer to the

Comptroller, incur tax losses, and lose tax advantages under the

application of a three-year dormancy period.

5. Other Considerations

In reaching this conclusion, we have considered whether the

Act might reasonably be interpreted to apply to 529 accounts only

at a stage that would fit more appropriately with their nature as tax-

advantaged, long-term savings plans—for example, in the case of

a college savings plan, after the beneficiary reaches a typical age

for enrolling in college. See Immanuel, 449 Md. at 87 (“[I]f two

acts can reasonably be construed together, so as to give effect to

both, such a construction is preferred, and the two should be

construed together to be interpreted consistently with their general

objectives and scope.”).

For some retirement accounts established pursuant to 26

U.S.C. § 401(a) and 26 U.S.C. § 408(a), including but not limited

to IRAs and IRA-based Self-Employed Retirement Accounts

(known as “Keogh” accounts), the Comptroller has fashioned such

a harmonizing rule by regulation. COMAR 03.05.01.06. The

regulation mimics the rule for IRAs from the 1981 uniform law:

under it, such accounts may not be presumed abandoned until they

reach the stage that distributions from them become mandatory,

which means after retirement age. Id.; see supra Part I.B

(discussing 1981 uniform act). As such, transfers under the

50 [108 Op. Att’y

regulation do not disrupt retirement savings plans prematurely and

do not trigger negative tax consequences. Neither the regulation

nor its history indicates which provision of the Abandoned

Property Act the Comptroller determined applied to the retirement

accounts. But given the regulation’s focus on mandatory

distributions, we assume it rests upon an interpretation of the term

“distributable” in the fiduciary section. See CL § 17-306

(presumption of abandonment arises “3 years after [property]

becomes payable or distributable”); see also Uniform Unclaimed

Property Act § 12(b) (1981) (adding IRA rule to the fiduciary

provision).

In our view, however, the Act does not leave room for an

analogous interpretation with respect to 529 accounts. Unlike tax-

advantaged retirement accounts, 529 accounts do not have

withdrawal deadlines. There are no required minimum

distributions. See 26 U.S.C. §§ 529(c)(3), 529A(c)(1). Even where

an account reaches some threshold event—such as the death of the

beneficiary, or the expiration of the benefits period for a Prepaid

Trust account (ten years beyond the projected enrollment date, plus

the number of tuition years purchased)—generally the funds may

be rolled over into another program or transferred to another

beneficiary and retain their tax advantages. See MPCT Discl. at

12-13. The tax advantages do not expire as they do in the

retirement context. So we cannot harmonize the 529 programs with

the Abandoned Property Act by concluding that the Act applies

only at the juncture that an account must be drawn down, because

for 529 accounts there is no such juncture. Nor would it be

plausible to interpret the Act to apply only at the point that account

holders may withdrawal funds without penalty for qualifying

expenses of the beneficiary: unlike retirement account custodians,

who know when the owner reaches the age at which tax-

advantaged funds become available without penalty, Maryland 529

does not know when an account beneficiary enrolls in a qualifying

educational institution or incurs qualifying disability expenses.

Of course, the Legislature might conclude for policy reasons

that the expiration of the benefits period for a Prepaid Trust

account, or some other event for accounts in any of the 529

programs, should trigger a dormancy period under the Act. See

Ala. Code § 16-33C-7(c) (providing that presumption of

abandonment applies to unclaimed prepaid accounts ten years after

the beneficiary’s college entrance date); supra note 17 (discussing

other states’ bespoke statutory solutions for applying unclaimed

property laws to 529 accounts). But, in our view, the statute in its

current form cannot reasonably be interpreted to mandate such a

Gen. 21] 51

tailor-made approach to 529 accounts. Compare CL §§ 17-306,

17-307, 17-308(b) (providing for three-year dormancy periods

generally triggered by the availability of funds to the owner), with

RUUPA § 203 (fashioning a unique thirty-year dormancy trigger

for 529 accounts).

We recognize that our view of the Abandoned Property Act’s

inapplicability to 529 accounts may have policy drawbacks. Like

any type of financial account, some participants will inevitably

forget about their 529 accounts and leave them unclaimed. See

GAO Unclaimed 401(k) Report, Summary (noting that $35 million

in unclaimed retirement savings was transferred to states in 2016).

If the Act is inapplicable, the Comptroller’s expertise in reuniting

such funds with their owners will not come to bear. Moreover, if

these funds remain unclaimed, the financial windfall that they

represent will not transfer to the State and will not flow to the

purposes that the General Assembly has designated for unclaimed

property.26

We reiterate, as we have on prior occasions when called upon

to interpret the Abandoned Property Act, that “[o]ur conclusion

about current law is not intended to address the[se] underlying

policy issue[s].” 77 Opinions of the Attorney General at 190.

Maryland, unlike some other states, has not enacted a statute that

speaks to how to balance the long-term, tax-advantaged nature of

529 accounts against the benefits of regulating unclaimed property.

Our view of current law, as we have explained, is that the General

Assembly did not intend the Act to govern, because application of

its three-year dormancy period to long-term 529 accounts would

clash with the context and purpose of the 529 enabling statutes and

would trigger tax losses and other consequences that defy common

sense.

26

As we understand the 529 programs’ finances, the financial

windfall of abandoned Prepaid Trust accounts will go to other account

holders, because the funds will maintain the corpus of the trust that

ultimately goes to pay out defined benefits. See Vega, 174 F.3d at 872

(explaining that unclaimed funds in a defined benefit retirement plan

would be available to pay out benefits to other participants if not subject

to unclaimed property laws). In the case of MCIP and ABLE, for which

Maryland 529 and outside administrators split fees, some of the financial

windfall will remain with Maryland 529 and some will go to the outside

administrators.

52 [108 Op. Att’y

B. Other Unclaimed Property Issues

The conclusion that the Abandoned Property Act does not

apply to 529 accounts makes it unnecessary to address your

agency’s second question, which seeks guidance on how to apply

the Act’s requirements to the accounts. But the Maryland Act and

the unclaimed property laws of other states still impose some

requirements on Maryland 529. For clarity and completeness, we

address these requirements below.

1. Uncashed Distribution Checks

Your agency’s opinion request does not mention uncashed

distribution checks, but we understand that Maryland 529’s

questions about complying with the Act arise in part from issues

related to them. See Office of Legislative Audits, Maryland 529

Audit Report at 21-22 (Dec. 2019) (“2019 OLA Audit Report”)

(noting “uncashed checks totaling approximately $1.7 million that

were more than three years old”). Whether the Act applies to these

uncashed checks is less clear than whether it applies to the 529

accounts. But, although not entirely clear, it is our view that, even

though the Act does not apply to 529 accounts themselves, it likely

does apply to sums payable on distribution checks that your agency

issues (or, perhaps more accurately, that are issued on your

agency’s behalf) that draw against 529 account balances.27

As an initial matter, sums payable on outstanding checks are

clearly “intangible personal property” of the check’s payee within

the meaning of unclaimed property laws. E.g., Division of

Unclaimed Prop. v. McKay Dee Credit Union, 958 P.2d 234, 237

n.4 (Utah 1998); Revenue Cabinet v. Blue Cross & Blue Shield of

Kentucky, Inc., 702 S.W.2d 433, 434-35 (Ky. 1986). A check is

evidence of the payee’s right to be paid a specified amount. Blue

27

It is our understanding that, although Maryland 529 formerly issued

some distribution checks in-house, id. at 16, outside program managers

now manage the issuance of all distribution checks on its behalf. Sample

distribution checks that we have reviewed make clear that Maryland

529—and not the outside program manager—is liable for the sums

payable on the checks. As such, Maryland 529 is the “holder” of the

sums payable on the checks for purposes of the Act, notwithstanding the

involvement of the outside manager. See CL § 17-101(i)(3). Our

analysis here of Maryland 529 checks therefore encompasses checks that

the outside program managers issue on Maryland 529’s behalf. In the

event that an outside program manager is directly liable on any

distribution checks, such checks would also likely be subject to the Act,

albeit under a different analysis. See infra note 30.

Gen. 21] 53

Cross of N. Cal. v. Cory, 120 Cal. App. 3d 723, 736 (1981). This

right to be paid, referred to as a “chose in action” in the early

uniform acts, is what constitutes intangible property. Id. at 735-36;

1954 Uniform Act § 1(f) (defining “owner” to be the “creditor,

claimant, or payee” in the case of “other choses in action” aside

from deposits and trusts); see Chose, Black’s Law Dictionary (11th

ed. 2019) (defining “chose in action,” in relevant part, as “[a]

proprietary right in personam, such as a debt owed by another

person”).

To be clear, the check itself is not intangible property; it is

only a “piece[] of paper” that documents the underlying right to be

paid. Revenue Cabinet, 702 S.W.2d at 434; accord Cory, 120 Cal.

App. 3d at 736. Thus, where the sum reflected on an outstanding

check is no longer payable—because, for example, the payee has

accepted payment through a different instrument or reversed the

original payment instructions—the sum is not intangible property

and is not subject to a presumption of abandonment. See Revenue

Cabinet, 702 S.W.2d at 436 (“The issue is whether [the payor] is

obliged to honor the debt which the checks represent.”); cf.

RUUPA § 1005(c) (providing that a payor may demonstrate that a

check was “replaced with another instrument,” “paid, satisfied, or

discharged,” “issued in error,” or prove other facts to overcome the

presumption that the check records an undischarged obligation).

Similarly, in the unusual circumstance where the check does not

represent a payment obligation to begin with—e.g., if the check

represents a settlement offer—there is no right to be paid and the

underlying sum is not intangible property. Revenue Cabinet, 702

S.W.2d at 735-36; cf. RUUPA § 1005(c)(1). In short, a check is

evidence of a right to be paid that constitutes intangible property,

but the evidence is rebuttable.

The Maryland Act tracks this treatment of sums payable on

uncashed checks, albeit with one exception for checks issued

between businesses. The Act follows the language of the 1954

Uniform Act in specifying that the “creditor, claimant, or payee” is

the “owner” of a “chose[] in action.” CL § 17-101(k)(3). The Act

does not define the terms “intangible personal property” or

“personal property” directly, but it does specify that certain items

do not constitute “personal property.” Id. § 17-101(m). Among

these excluded items are “[o]utstanding checks or credits issued to

vendors or commercial customers in the ordinary course of

business,” id. § 17-101(m)(3), an exclusion that the General

Assembly enacted in 1998 as part of a package of “business-to-

business” exceptions, 1998 Md. Laws, ch. 663; see Siemens USA

Holdings, Inc. v. Geisenberger, 17 F.4th 393, 417 n.32 (3d Cir.

54 [108 Op. Att’y

2021) (“[B]usiness-to-business transactions and gift certificates are

exempt from several states’ escheatment laws.”). If sums payable

on checks were not ordinarily “intangible property” under the Act,

that exclusion would not have been necessary. In light of these

provisions, then, sums payable on uncashed checks constitute

“intangible personal property” under the Act, unless the checks fall

within the business-to-business exception. See CL § 17-101(k)(3),

(m).28

Once the term “intangible personal property” is understood to

generally include sums payable on uncashed checks, one can easily

28

We do not think that the business-to-business exception is likely to

apply here. First of all, government agencies such as Maryland 529

might not even fall within the scope of the exception, which appears

aimed at transactions between private businesses. See Siemens USA

Holdings, Inc., 17 F.4th at 417 n.32 (noting that the exception is for

“business-to-business transactions”); Bill File on H.B. 48, 1998 Leg.,

Reg. Sess., Economic Matters Comm., Bill Analysis at 2 (explaining that

the bill sought to align the Act with the fact that “[c]redit balances

between businesses are often resolved in ways that are not reflected in

the businesses[’] accounting records” and providing an example of an

uncashed check for the supply of goods between private businesses). But

as we do not have complete information about the range of checks that

Maryland 529 issues or its business relationships, we hesitate to decide

whether the business-to-business exception could ever exempt a

Maryland 529 check from the Act. Rather, in responding to the question

about 529 accounts, we conclude only that the variety of checks of which

we are aware that draw against 529 account balances—namely,

distribution checks sent to account holders, beneficiaries, and

educational institutions, see 2019 OLA Audit Report at 15, 21—do not

fall within the exception. As for those checks, the “business-to-

business” exemption applies only to “[o]utstanding checks or credits

issued to vendors or commercial customers in the ordinary course of

business.” CL § 17-101(m)(3). Account holders, beneficiaries, and

educational institutions do not fit within the plain meaning of the term

“vendors or commercial customers” in these circumstances, especially

when that language is understood in the context of the underlying

legislative purpose to exempt sums payable on checks issued between

businesses in high-volume commercial relationships. See

§ 17-101(m)(3); Bill File on H.B. 48, 1998 Leg., Reg. Sess., Economic

Matters Comm., Bill Analysis at 2. Thus, CL § 17-101(m)(3) does not

exempt these checks from the reach of the Act. (To be clear, we do not

mean to say that an educational institution could never be the “vendor or

commercial customer” of a private business, only that an educational

institution receiving a tuition payment from a student or parent—or from

a savings plan that distributes tuition payments on their behalf—is not a

“vendor or commercial customer” with respect to such persons or

entities.)

Gen. 21] 55

see based on the statutory text how the Act might apply to sums

payable on uncashed distribution checks issued by Maryland 529.

Regardless of whether Maryland 529 is considered, for purposes of

the Act, to be a fiduciary governed by CL § 17-306, a public entity

governed by CL § 17-307, or a holder of property that falls under

the omnibus provision, CL § 17-308(b), the language of the Act

appears to subject the “intangible personal property” that Maryland

529 holds for others to a presumption of abandonment after a three-

year dormancy period. In other words, all three sections of the Act

that might apply to Maryland 529 align on the point that the

“intangible personal property” it holds is, if otherwise covered by

the Act, subject to a three-year dormancy period.

Although we have concluded that the 529 accounts are not

covered by the Act, these provisions of the Act, when applied to

sums payable on uncashed checks, do not appear to raise the same

thorny ambiguities that they do when applied to 529 accounts

themselves. The unique tax advantages and long-term investment

timelines of 529 accounts set them apart from other investment

accounts in a way that the Act does not accommodate, but

Maryland 529 distribution checks do not (so far as we are aware)

contain unique features that set them apart in any relevant way from

other checks evidencing rights to receive payment. Some of the

uncashed checks that the agency has dealt with in the past are cash

distributions to account holders or beneficiaries; others are tuition

payments that Maryland 529 remits directly to educational

institutions. See 2019 OLA Audit Report at 15, 21. Either way,

the “owner” of the sum payable on a Maryland 529 check is the

payee (whether that payee be an account holder, a beneficiary, or a

school). CL § 17-101(k)(3). And a sum payable on a Maryland

529 check would clearly be either “payable” within the plain

language of the omnibus and fiduciary provisions, id. §§ 17-306,

17-308(b), or “held for the [payee]” within the meaning of the

public entities provision, id. § 17-307.29

29

ABLE account holders may opt to load account funds onto a

prepaid card that can be used for qualifying expenses, rather than taking

distributions by check. See ABLE Discl. at 17-18. We understand that

these prepaid cards have not prompted legal questions under the

Abandoned Property Act to this point, and we therefore do not address

how the Act might apply to them. On a separate note, we understand

that Maryland 529 does not yet pay benefits by electronic transfer (as

opposed to by check), and thus we do not address any issues that might

arise related to such transfers.

56 [108 Op. Att’y

Of course, as noted earlier, if such a sum no longer remains

payable for some concrete reason—because it was paid through a

separate instrument, for example, or because the check was issued

in error—then the Act does not apply to it. See Revenue Cabinet,

702 S.W.2d at 436. In the ordinary course, however, the text of

any of the three relevant provisions governs the sums payable on

Maryland 529 checks, just as the provisions govern sums payable

on other checks. See Cory, 120 Cal. App. 3d at 736. As such, if a

sum payable on a Maryland 529 check remains unclaimed for three

years, in our view it is presumed abandoned under the Act unless

the payee corresponds about the sum or indicates an interest in it.

See CL §§ 17-306, 17-307, 17-308(b).30

Importantly, we also think that application of the Act to the

sums payable on Maryland 529 checks comports with the context

and purpose of the relevant statutory schemes and avoids the

illogical consequences that would follow from application of the

Act to 529 accounts themselves. An authorization of the account

holder precipitates the issuance of a check that draws down account

funds because, at least as we understand it, Maryland 529 generally

distributes money from an account only at the account holder’s

direction. See, e.g., Educ. § 18-19A-04(b) (“Distributions shall be

requested by the account holder”).31 Checks for amounts to be

30

One provision of the Act expressly subjects sums payable on

outstanding checks on which any “banking or financial organization or

business association is directly liable” to a three-year dormancy period.

CL § 17-301(b)(3). We doubt that this provision applies to Maryland

529 checks. The Act’s definitions of “banking organization,” “financial

organization” and “business organization” do not contain any indication

that the General Assembly intended them to encompass State agencies.

Id. § 17-101(d), (e), (h); see 73 Opinions of the Attorney General 234,

236 (1988) (explaining that general statutory terms do not “extend to the

State or its political subdivisions in the absence of some manifest

legislative intention that they be included”). If the outside program

managers administering any of the three 529 programs for Maryland 529

issue distribution checks on which the outside managers are directly

liable, it seems likely that this provision would apply to such checks. If

so, it would yield the same result as the Act’s other provisions do for

Maryland 529 checks that draw against 529 account balances: sums

payable on the checks would be subject to a three-year dormancy period.

See CL § 17-301(b)(3).

31

According to the program disclosures, Maryland 529 distributes

funds from an account without the account holder’s authorization only

in unusual circumstances—such as where a court order requires the

distribution, or perhaps where a 529 program inadvertently accepts a

Gen. 21] 57

drawn from 529 accounts thus represent funds pushed from the

accounts by the active choice of an account holder—not funds that

would be removed from accounts and subjected to tax

consequences only because of three years of inactivity. We do not

perceive any affront to the nature of the 529 schemes in following

the Act’s prescriptions for regulating such unclaimed funds by

turning them over to the Comptroller for safekeeping and location

efforts.32

Indeed, subjecting sums payable on uncashed distribution

checks to the Act would not trigger the illogical tax consequences

that would follow from subjecting 529 accounts themselves to the

Act. The IRS has not clarified whether unclaimed distribution

checks carry tax consequences on their own, regardless of any

subsequent transfers to an unclaimed property fund. See IRS Rev.

Rul. 19-19, 2019-36 I.R.B. (holding, in the separate context of tax-

advantaged retirement savings, that a payee’s failure to cash a

distribution check that she received does not alter the tax

consequences of the distribution, but not addressing situations

where the plan does not know whether a check was received and

noting that the IRS continues to analyze “situations involving

contribution that exceeds statutory caps. See MCIP Discl. at 28 (court

order exception); ABLE Discl. at 14 (excess contributions). Even in

these circumstances, however, some event other than mere account

inactivity triggers the distribution. The termination of an MPCT account

due to the expiration of the benefits period (i.e., the period that ends ten-

plus years after the beneficiary’s projected college enrollment date) does

not trigger a distribution unless the account holder authorizes it. MPCT

Discl. at 12-13.

32

To be clear, in reaching this conclusion with respect to sums

payable on 529 distribution checks, we do not mean to suggest that the

Act would be construed to apply to sums payable on uncashed checks

(or any other property) held by State-sponsored retirement plans for

public employees. The applicability of the Act to those plans would raise

different questions that are outside the scope of this opinion. To take just

one example, such plans might be governed by alternative schemes for

the regulation of unclaimed property. See Md. Code Ann., State Pers.

& Pens. § 21-506 (authorizing the State Retirement Agency to publish

the names of participants with unclaimed contributions or benefits),

§ 21-311(d) (authorizing the State Retirement Agency to transfer

unclaimed employee contributions to a fund used to pay out benefits);

see also supra note 15 (discussing unique issues raised by governmental

retirement plans). As our analysis with respect to both 529 accounts and

checks shows, whether the Act applies in a particular context often turns

upon interpretive conflicts, illogical consequences, and other

considerations unique to that context. For this reason, our conclusions

here should not be extended to another context without further analysis.

58 [108 Op. Att’y

missing individuals”); Bruce J. McNeil, Nonqualified Deferred

Compensation Plans § 1:10 (2022) (“What the ruling does not

address is the degree to which modifications in the fact set must

vary to impact the holding . . . . It is hoped that future guidance will

be released to help plans handle variations on this uncashed check

scenario . . . .”). But there is no need to decide that question here.

Rather, the point is that, even if transfer of these sums to the

Comptroller would create tax consequences not already generated

by the issuance of the distribution checks, those tax consequences

would not be illogical.

Unlike in the hypothetical situation where an account

transfers to the Comptroller due to inactivity alone, the account

holder has authorized the distribution of the sum payable on the

check. This authorization probably means, in most cases, that tax

penalties either will not result (because the beneficiary has

qualifying expenses in the year of the distribution) or will be

expected (because the account holder initiated the distribution

notwithstanding a lack of qualifying expenses). See 2019 OLA

Audit Report at 15-16 (distributions are often to “reimburse

[participants] for tuition and qualified expenses already paid” and

to pay requested refunds).

It is true that account holders and beneficiaries might realize

some benefits if the sums payable on uncashed checks remained in

their accounts rather than transferring to the Comptroller after three

years. See 2019 OLA Audit Report at 22 (under Maryland 529

practice, sums payable on uncashed checks from the Prepaid Trust

are credited “back to the associated accounts”). In the accounts,

these funds could continue to appreciate attributable earnings; with

the Comptroller, they will not. See Vega, 174 F.3d at 873

(explaining that the transfer of sums payable on uncashed checks

from a pension plan to a state unclaimed property fund depletes the

sums by halting their appreciation).

Yet, once again, because this consequence flows from the

account holder’s decision to trigger a distribution—and not merely

from three years of inactivity on a long-term investment—it does

not strike us as illogical. Most provisions in the Act, including

those potentially relevant to Maryland 529, expressly contemplate

transfer to the Comptroller of interest-bearing or invested property

that is left unclaimed for more than three years. See CL § 17-306

(covering “all intangible personal property and any income or

increment on it” held by fiduciaries (emphasis added)); § 17-308(b)

(similar language in omnibus provision). These provisions no

doubt cover a wide swath of funds that, if allowed to remain with

Gen. 21] 59

their source, would accrue interest or other appreciation. See 1954

Uniform Act § 9 cmt (explaining that the omnibus section applies

to items such as “stocks, bonds, . . . interest, dividends, income, . . .

together with any interest or increment thereon”). But the General

Assembly, following the 1954 uniform law, nonetheless subjected

such funds to the Act, presumably in large part because their

transfer to the Comptroller improves the chances of finding the

owners. See id., Prefatory Note, at 2 (policy purposes).

We also do not think that application of the Act to sums

payable on the uncashed distribution checks contravenes the 529

enabling statutes. Each of the enabling statutes, as we have

discussed, prohibits the deposit of 529 funds into the State

Treasury. E.g., Educ. § 18-1903(f). Because funds that are

transferred to the Comptroller as abandoned property are then

deposited in the State Treasury, CL § 17-317, there is at least some

question as to whether this prohibition should be read to exempt

even the agency’s uncashed distribution checks from the scope of

the Abandoned Property Act. But the prohibition on Treasury

deposits only applies to program moneys—for example, “[m]oney

of the Trust,” in the case of the Prepaid Trust, Educ. § 18-1903(f),

and “[m]oney of the Plan” in the case of the Investment Plan, id.

§ 18-91A-05(c). That language is ambiguous as to whether it was

intended to include sums payable on distribution checks. Such

sums, as we have explained, represent moneys that the account

holder has affirmatively decided to remove from the relevant 529

program. This decision, by triggering the issuance of a distribution

check, creates an enforceable legal obligation that subjects the

sums to non-program constraints from which 529 accounts

themselves are shielded. See generally Diemar & Kirk Co. v. Smart

Styles, Inc., 261 N.C. 156, 159 (1964) (explaining that a check

constitutes a contract between issuer and payee). Most obviously,

it exposes the sums to outside interests—namely, those of the

payees on the checks, who are not necessarily program participants.

See 2019 OLA Audit Report at 21 (noting distribution checks

payable to colleges and universities). Further, by issuing the

distribution check, Maryland 529 has already taken the action

required of it to push the funds out of its coffers. See generally

Messing v. Bank of America, N.A., 373 Md. 672, 678 (2003)

(explaining that a check is “payable on demand”). Whether the

funds in fact transfer out depends only on whether the payee or an

endorsee presents the check for payment.

Thus, although the moneys technically remain with Maryland

529 until they clear the bank, there is reason to doubt that the

General Assembly would have viewed those moneys as program

60 [108 Op. Att’y

funds within the meaning of provisions like Educ. §§ 18-1903(f)

and 18-91A-05(c). In other words, we cannot say from the

statutory language alone that the General Assembly intended the

prohibition on Treasury deposits of program moneys to include the

deposit of these outgoing sums in the State Treasury for limited

purposes under the Abandoned Property Act. After all, the

legislative intent behind the prohibition was to prevent 529 funds

from being “captured by the State,” Hoffman Letter, and we do not

think the General Assembly would have viewed it as improper

“capture” for the Comptroller merely to take custody of sums

payable on errant distribution checks for the primary purpose of

safeguarding them for the payee after the account holder has

already acted affirmatively to remove the funds from the account.

Cf. Connecticut Mutual Life Ins. Co. v. Moore, 333 U.S. 541, 547

(1948) (explaining that the state acts as a “conservator” for

abandoned funds under unclaimed property laws).

Instead, we must seek to harmonize the language of the 529

enabling statutes with the Abandoned Property Act. See Immanuel,

449 Md. at 87. The 529 statutes, while clearly reflecting an intent

to protect 529 accounts from diversion to other State uses, do not

specifically address the phenomenon of uncashed checks (or even

mention the Abandoned Property Act, the plain language of which

would otherwise apply to the sums payable on these checks).

In our view, interpreting the Abandoned Property Act to apply

to sums payable on uncashed distribution checks but not to the

accounts themselves achieves the requisite interpretative harmony.

Under this interpretation, 529 accounts do not transfer to the State

Treasury due to inactivity alone, in conformity with the

safeguarding objective of the 529 enabling statutes and with the

wider context and purpose of the 529 programs, which would be

undermined by the illogical tax consequences and other

ramifications of applying the Act to the accounts themselves. At

the same time, under our interpretation, sums payable on uncashed

distribution checks that remain unclaimed beyond the dormancy

period will transfer to the Comptroller (assuming Maryland 529’s

efforts to contact the payee do not succeed). Such sums, as we have

explained, remain unclaimed even after the account holder has

actively chosen to pull them out of the tax-advantaged, long-term

savings account. Unlike funds that sit undisturbed within 529

accounts themselves, sums payable on distribution checks that

remain unclaimed for three years fall more logically within the

sweep of the Abandoned Property Act’s program for locating

missing property owners than the 529 statutes’ prohibitions against

diversion of long-term education and disability savings.

Gen. 21] 61

We recognize that it may seem odd at first glance to

distinguish sums payable on checks drawn against 529 accounts

from the underlying accounts. After all, both types of funds come

from the same pool. See Vega, 174 F.3d at 873 (noting, in the

pension plan context, that “until the check to the beneficiary is

actually presented to the plan for payment through the banking

system, and paid, the money due to the beneficiary is an asset of

the plan”). But the Maryland Act, like unclaimed property laws in

general, treats sums payable on uncashed checks as a distinct type

of intangible personal property. See CL § 17-101(m)(3) (business-

to-business exemption for “outstanding checks”); § 17-301(b)(3)

(addressing “sum[s] payable on a check” in the banking and

financial sectors); see also RUUPA § 102(24) (defining “property”

to include intangible property “evidenced by . . . [a] check”).

Because the statute itself traces a distinction between sums payable

on uncashed checks and other types of intangible property, we

think that the same distinction logically bears upon the 529

programs, particularly given our conclusion that application of the

Act to the uncashed checks (but not the underlying accounts) does

not conflict with the General Assembly’s statutory scheme for

those programs.

We make two final points about compliance with the Act’s

requirements for uncashed checks. First, an organization may

cancel or void an uncashed check, but this action by itself does not

alter the organization’s obligation to report the sum payable on the

check as abandoned property. The Act’s presumption of

abandonment applies to the underlying payment obligation that the

check records, not the check itself. Cory, 120 Cal. App. 3d at 736.

As we have explained, so long as the underlying sum remains due

to the payee, it remains subject to the Act’s mandates. See id.;

Revenue Cabinet, 702 S.W.2d at 436. Were the rule otherwise, the

Act’s regulation of sums payable on uncashed checks would have

little meaning: financial institutions and other property holders

could evade it and retain the windfall of unclaimed sums by voiding

uncashed checks before the end of the three-year dormancy period.

See Treasurer & Receiver General v. John Hancock Mut. Life Ins.

Co., 388 Mass. 410, 417-18 (1983) (rejecting an interpretation that

“would create a situation in which the purposes of the

[Massachusetts] abandoned property act, to reunite the property

with its owners and to employ the property for public purposes in

the interim, could not be achieved”); cf. RUUPA § 1005 & cmt.

(providing, in line with the case law on uncashed checks, that to

overcome the presumption that an uncashed check corresponds to

an undischarged obligation to pay, the holder may prove the lack

of any such undischarged obligation).

62 [108 Op. Att’y

Second, before reporting and transferring sums payable on

uncashed checks to the Comptroller upon expiration of the three-

year dormancy period, Maryland 529 must send written notice to

the payee by first-class mail if the sum exceeds $100. CL

§ 17-308.2.

2. Out-of-State Property Owners

In responding to your agency’s questions, we have been

focused on Maryland’s Abandoned Property Act. We note,

however, that where Maryland 529 holds unclaimed property that

belongs to people in other states, the unclaimed property laws of

the other states will typically apply. See CL § 17-309; Delaware

v. Pennsylvania, 143 S. Ct. 696, 701-03 (2023) (explaining that,

under federal common law, the state of the last known address of

the owner has primary power to escheat unclaimed intangible

property, except where Congress has abrogated the common law

rule for money orders, traveler’s checks, and similar financial

products).

For uncashed checks, if the payee’s last known address is in

another state, Maryland 529 should consult the laws of that state to

determine if and when it must treat the unclaimed sum as

abandoned. See CL § 17-309. Many state laws subject uncashed

checks to a three-year dormancy period. See generally RUUPA

§§ 102(24)(B)(i), 201(13), 201 cmt. (three-year dormancy period

for most property types, including checks).

Similarly, for 529 accounts held for participants who reside in

other states, Maryland 529 should consult the unclaimed property

laws of the other states. See Delaware, 143 S. Ct. at 701-03.

Unlike Maryland’s Act, the unclaimed property laws of some other

states do apply to 529 accounts and provide that they shall be

presumed abandoned in certain circumstances. E.g., Colo. Rev.

Stat. Ann. § 38-13-203 (following RUUPA’s 30-year waiting

period before dormancy period may begin for college savings

accounts).33

33

Although the issue is not one of Maryland law, we note that under

the laws of other states that follow RUUPA in regulating unclaimed 529

accounts, the relevant ownership address would appear to be that of the

account holder. See RUUPA § 102 cmt. (“[F]or bank accounts,

brokerage accounts, IRAs, and other similar property, the legal owner of

the account would take precedence over a named beneficiary who does

not yet have legal ownership of the account.”).

Gen. 21] 63

III

Conclusion

The extent to which the Abandoned Property Act should

apply to Maryland 529 is an issue ripe for legislative consideration

and one to which other state legislatures have spoken. As Maryland

law stands now, we conclude that the Act does not apply to

Maryland 529 accounts. The General Assembly likely did not

intend the Act’s three-year, generally applicable dormancy periods

to govern the tax-advantaged, long-term savings vehicles that the

529 enabling statutes established. But our view is that the Act as

currently written likely does apply to sums payable on uncashed

distribution checks that draw against 529 account balances,

although the question is certainly close. As a final note, Maryland

529 should consult the unclaimed property laws of other states

when it holds unclaimed property, including unclaimed accounts or

checks, for out-of-state participants.

Anthony G. Brown

Attorney General of Maryland

Ben Harrington

Assistant Attorney General

Patrick B. Hughes

Chief Counsel, Opinions and Advice

* Meghan Marek, Assistant Attorney General, contributed

significantly to the preparation of this opinion.