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Escheatment and Your Money

Words mean things, and big words sometimes have big meanings.  Escheatment is one of those, so I thought I’d enlighten everyone, in case some of you are not aware of this big word.  Essentially, it refers to the process of having a government take your assets, with “cause” that they must define.  Be aware that it actually can impact anyone with any amount of assets.

Today, in America, we have changing conditions in the application of escheatment, so I thought I’d better explain how it was, and now is, implemented.  Our government (at many levels) has long professed the right to claim property that has been declared by them that you have abandoned.  Here’s the rub; what is the definition of “abandoned,” and how is it changing?  Further, how does it affect you, and what can be done to protect your personal assets?

In our daily financial planning business, we see many people who struggle to maintain day-to-day control over several checking accounts, brokerage accounts, investments, various 401(k)s, IRAs, real properties, etc.  This is the very condition I long ago coined as “financial clutter.”  While it is a terrible malady, it is easily curable.  In fact, consolidation for simplification is a big part of our regular personal financial practice.

Back to recent changes in escheatment laws.  States have been getting more aggressive in the reclamation of unclaimed property in an expeditious manner.  There are things you should know, and things you should do, to avoid problems with your current and future asset ownership.  Here are some guidelines:

  • The definition of “abandoned” used to mean that a letter sent to your address of record was returned by the post office as “undeliverable”
  • Today, many organizations have changed to the term “inactive” to identify these assets for potential escheatment
  • Recently, even the very definition of “inactive” is being changed
  • In the past, reinvested interest or equity-returned dividends constituted activity, and the account was not deemed inactive
  • Now, that may not be enough to avoid escheatment
  • In many cases today, there must be a more significant transaction in an account (not a “passive” activity) in order to prevent the classification as inactive being applied
  • Adding insult to injury, the statutes for inactivity are shortening in time requirements
  • What used to be a five-year inactive term is very often now down to three years
  • Institutions are creating less and less correspondence with account owners with limited activity

It is relatively simple to avoid the “inactive” classification, and the ultimate confiscation, of your assets.  Creating account activity will do the job, but let’s look at it from an overall financial planning standpoint.  Consolidating assets into fewer account is a simple matter, easily handled by a competent financial advisor.  Accounts in danger of undergoing escheatment are, by the very definition, not helping you achieve your financial goals, or are at best lagging.  Get your assets working, and the begin to problems disappear.

What if escheatment happens to you?  Assuming you actually find out, you need to have proper documentation to reclaim your property.  That should not be a big problem for anyone who retains paperwork for a few years.  For a small amount of hassle, you can be made whole again.  But why let it come to that?  Get organized.  Get help if you need to.  After all, that’s why we are here.

Meanwhile, there are websites you can and should check periodically to see if you have assets that have been taken over by governments:


  • www.unclaimedassets.com
  • www.usa.gov/unclaimed-money
  • missingmoney.com
  • www.fltreasurehunt.org
  • State-based databases for any state in which you once lived

There are probably many more, but the search might be profitable, and would certainly be worth your while.  What do you have to lose?  The worst case is that you spent a few minutes and recovered nothing, and the best case is that you may have identified and reclaimed forgotten assets.  Either way, you will be better off for knowing the truth.