Escheatment is another fun (not really) term that I learned this tax season.  #2 didn’t even know this term!

Did you know that if you have a stock that is on a dividend reinvestment program and you don’t login to the webpage or call them or write to them (because it’s changed companies so you need to re-register and they send you a nice quarterly report and tax forms so there’s no reason to login), that after “some amount of time” the company has to, by law (depending on your state), declare your account dormant (even if you have ANOTHER stock from the exact same company with the exact same contact info that isn’t dormant because its dividends are going to your bank account, even if the reinvested dividends from the dormant account are buying shares in the non-dormant account).  Then they have to notify you 3 times to contact them.  The third time requires signatures from everyone on the account and you can no longer just login or call them to stop the dormancy.  The first two times can apparently be a one line suggestion that you login to their webpage to avoid dormancy hidden in the middle of a statement full of words and numbers.  So the third time with the signatures comes as a surprise.

What happens if you don’t get the signatures to the PO box across the country in time?  (Supposedly 30 days, but for some reason it takes a lot longer for the letter to get to you and then you don’t really pay attention to it until you start doing your taxes and go what is this OMG, I have 2 days.)  According to the internet, your entire dormant account is given to the state.  Then the state sells it (and you can’t sell it before that happens because your account is dormant so you can look but you can’t touch online).  If you want the money back, you have to go through the state’s lost money thing.

Of course, it isn’t clear from that third notice which state is going to get your money.  So good luck with that.

Update:  Escheatement averted.  And a reminder that I have to contact them at least once every 3 years in order to avoid escheatment, which can include logging into the account.  Maybe something to do at tax time.

So more fun with investing.  Seriously guys, Vanguard index funds.  Or target-date funds.  Maybe TIAA-Cref if that’s what your employer uses.


14 Responses to “Escheatment”

  1. Comradde PhysioProffe Says:

    Reason number eleventeen thousand f*cktillion why any individual is f*cken delusional if they think they should pick-and-choose stocks and bonds to buy and sell. You really think you’re gonna beat the professional sociopaths and high-speed computer clusters at Goldman Sachs and the other vampires sucking the blood out of the real economy?

  2. Debbie M Says:

    Ugh. Glad you averted it. Yikes.

  3. bogart Says:

    Oof, my state purportedly holds “lost money” (etc.) in trust in perpetuity (a quantity of time that’s been abbreviated to 5 years in the internet era — right?), but of course that only helps if money is — here!

  4. Foscavista Says:

    I can’t stop seeing the word “cheat” in “escheatment.”

  5. Leigh Says:

    Ugh I first thought the term was going to be that you cheated on your taxes! But this is far more annoying. Glad you avoided getting hit with this eventually!

  6. plantingourpennies Says:

    Shoot, now i am paranoid about me PoP’s eTrade account that might not have been accessed in 4 years. The balance is so small and it’s technically his “fun money”, so we never look at it. I wonder – would connecting to mint or a similar service prevent this type of thing from happening as it automatically pings the accounts to download new transactions every so often?

    • nicoleandmaggie Says:

      I’ve been wondering that too. This particular account isn’t hooked up to MINT, and we login to the ones that are more frequently. (I could have sworn we logged into this one more frequently than once every 3 years, but they probably lost that information when the company changed communication providers.)

  7. chacha1 Says:

    Yikes. Now I’m extra glad I closed/rolled over/generally packed into all one box my various money holding devices a few years back.
    Thanks to CPP for “f*cktillion.” I am adding that to my arsenal. :-)

  8. nicoleandmaggie Says:

    It hasn’t been three years, but I got hit with one of these letters again for the same account. They switched providers again and apparently one of the many letters they sent to us got sent back even though the others didn’t. Either that or (according to the escheatment letter they sent– they don’t specify the actual reason, just potential reasons) they tried to make a deposit and failed, which is also possible.

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