What is Escheatment?
All states have laws governing the handling of abandoned property. Financial institutions, including brokerage firms, banks and mutual funds, are required to report personal property that has been abandoned and then turn that property over to the state. The word “escheatment” is defined as the process of turning over to a state property that is considered to be abandoned or unclaimed under state law.
Different states have different rules, and the rules can change with short notice. Mutual fund assets may be considered abandoned property if the account has uncashed checks, if the US Post Office concludes that mail to the account holder is undeliverable or, in some circumstances, if there has been a lack of activity in the account for an extended period of time. (For a list of “dormancy periods” by state, CLICK HERE). If any of these conditions are met, the account may be at risk to be escheated to the state of the owner’s last known residence.
How can I avoid Escheatment?
The average long-term mutual fund investor could easily be designated as “lost,” when in reality they may simply be happy with their investment and have no reason to communicate with their mutual fund providers. To avoid escheatment, it is recommended that you contact your mutual fund companies at least once each year.
What is considered contact?
- A phone call to a client services representative
- Logging in to your account online
- Mailing a letter/request to your fund company
What is not considered contact?
- Visiting your fund company’s public website
- A systematic investment plan
- A systematic withdrawal plan
- Dividend/capital gains reinvestments
You can contact Weitz by calling a client services representative at 800-304-9745, or by logging in to your account on our homepage. In addition, be sure to cash all dividend and redemption checks you receive, and notify us promptly if you have a change of name or address.
What if I believe I have assets that have been escheated to my state?
You will need to work with your state division of unclaimed property to reclaim the assets. You can begin your search on the National Association of Unclaimed Property Administrators website.