How To Avoid Escheatment Of Financial Assets

Escheatment is a process designed for a state to assume ownership of an asset whose owner has died. It is usually triggered after a certain period of dormancy which indicates that the owner has died or abandoned the asset. However, dormancy can pose problems for some long term investors that stay hands off their accounts. But there are some ways to avoid getting an accidental escheatment such as the following:

• Make some sort of contact with the financial institute even if it is making small trades or speaking to a representative. A minimum of occassional activity of any sort will show the owner is still among the living.
• Make sure to cash dividend checks. While this seems like something everyone would do to avoid the check expiring and losing the money, many people will ignore checks that are small and seemingly not worth the time to deposit.
• Filling out any proxy vote paperwork that is mailed to an investor will show you are still on the mortal coil.
• Make sure to update you contact and other personal information. This is a good strategy because it allows the financial institute to more easily reach you if needed and shows that the owner has not abandoned the property through death or otherwise.

See Claire Boyte-White, 4 Ways to Avoid Escheatment of a Stock Account, Investopedia, October 29, 2015.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.