Don't let your state steal your stock!

Abandoned property laws in the U.S. require all shareholders to keep their account information current to avoid shares and/or funds from being turned over to the state as a result of an account being deemed abandoned or lost. All companies in the U.S., including the transfer agent for your stock, are required to follow these abandoned property laws and regulations.

The problem is that financially-strapped states are getting much more aggressive (too aggressive in our opinion) about going after property by changing the definition of what is considered abandoned. The process of taking this property is called “escheat” which seems appropriate because the way states are handling it seems like cheating to us.

The way to keep this from happening to you is to make sure that you take proactive steps to show that your account is active.

For stocks, one of the most important things to remember is to keep your transfer agent (this is who your company uses to handle all their shareholder stuff) informed of any address changes to make sure you get all communication. It’s also a good idea to set up on-line access to your stock account at the transfer agent website. In addition, do one of the following things at least every two years:

1. If you get dividend checks, make sure you cash them in a timely manner, no matter how small they may be.
2. You will get a proxy on an annual basis. Make sure you vote your proxy. You can do this on-line, by phone, or by mail and it only takes 2 minutes.
3. Make some sort of contact with your transfer agent via phone, email, or mail. This will generally be logged as activity.

If your stock has already been escheated, all is not lost, you can still go through a process to claim your property. Each state has a website where you can search unclaimed property to see if any is yours. Note that if the state escheated your Apple stock 10 years ago, you will only get the proceeds of the liquidated stock at the time they took it – never mind that Apple has soared in the meantime including stock splits.

For more information and useful links go to the escheat page at GiveAshare.com.