Escheatment: Monitor Unclaimed Property Lists

Finger reminderA state government has the legal right to claim the property of a person who has passed away and has no heirs or beneficiaries. Here's the problem: almost all state governments today are experiencing significant shortfalls in revenues. As a result, some states have become a little too eager and too aggressive about claiming property through escheatment.

What often happens is that an account holder has not stayed in contact with a brokerage or financial institute for a long time. The financial institute then reports the assets in an account as unclaimed property. Rather than making any effort to locate the person who owns the account, the government claims the property as its own. This can create issues for people who have long term investments as part of their retirement and estate plans.

Recently, Investopedia listed how you can avoid this happening to your stock accounts in "4 Ways to Avoid Escheatment of a Stock Account."

The tips include:

  • Make regular contact with the brokerage even if it is just to speak to a representative.
  • Cash all dividend checks. Even if you think the amount of the dividend is too small to bother with, cash the check so that the brokerage knows a living person is receiving the checks.
  • Complete any proxy voting paperwork even if you do not care about it, as this will show that you are still alive.
  • Update contact information when it changes so that the brokerage knows how to get in touch with you.

If you follow the above steps, then your estate will not find itself in the position of the government having already claimed your assets through escheatment before the assets could be distributed to your heirs.

An experience estate planning attorney help you avoid escheatment by having appropriate default heirs listed in your estate plan.

For additional information on escheatment and other estate planning topics in Houston, please click here to visit my website.

Reference: Investopedia (October 29, 2015) "4 Ways to Avoid Escheatment of a Stock Account."


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