Dedicated to Deposits: Deals, Data, and Discussion
Featured Savings Rates
Featured Accounts

Warnings About How Bank Accounts And IRAs Can Get Escheated

Sunday, July 22, 2012 - 4:54 AM
All states have what's known as an escheatment or unclaimed property law, which requires businesses to hand over abandoned financial assets to the government. Unfortnately for savers, states have been reducing the inactivity periods that can initiate escheatment. This Wall Street Journal article has some useful warnings about how one of your accounts could get hit by escheatment. I found two interesting possibilities:
If you have multiple IRAs and you choose to take distributions from only one of them to start, be sure to contact all of your IRA custodians to let them know
it isn't unheard of for a customer's CD to get escheated, even though he or she has been making deposits and withdrawals from a checking or savings account at the same bank.

I have not heard about CDs being escheated. Have you seen this case? My guess is that it's more likely when people just let their CDs renew without changes. It may be wise to at least withdraw or add a little when the CD is renewed so that some activity on the account is recorded.
Ken TuminKen Tumin5,471 posts since
Nov 29, 2009
Rep Points: 125,611
1. Sunday, July 22, 2012 - 8:30 AM
Thanks for the warning Ken but can they "escheat" an account without at least sending an email or letter to owner to find out why there has been no activity on the account especially an IRA?  My DP has 3 Iras and I combine them and take his RMD for him from just one each year but I do usually let the others know why I am not taking their portion from them.  I also try to switch to different ones when feasible so that the RMD will not be coming out of the same account every year.  This helps also to keep activity on his other accounts.  Now that I know about this escheat factor, I will keep a closer watch on accounts.  Much appreciation for keeping us on top of things with our finances.
paoli2paoli21,398 posts since
Aug 10, 2011
Rep Points: 6,129
2. Sunday, July 22, 2012 - 8:39 AM
The advice to make contact in a manner which leaves footprints (for example, log in to a password-protected website or automated phone system. If you write a letter or speak to a telephone representative, get a response in writing to establish proof of contact) is very good. 

A couple of additional suggestions:

1.  If you make contact through a login, it would be smart to also take a screen print of the balance information once you are signed in and put a copy in your files.  That gives you proof not only that you logged in, but the date on which you did so.  

2.  If you write a letter, in addition to requesting a response in writing, mail it with a "certificate of mailing" (~$1.15 at the Post Office), which establishes the date on which you have initiated contact of some sort, and stay on top of this to make sure you receive the response.

3.  If you speak with a phone rep, note the date, time of day and name of representative and put a copy in your files, request a response in writing and an estimate of when you should anticipate receiving the response.  Stay on top of that date. 
pearlbrownpearlbrown1,467 posts since
Nov 2, 2010
Rep Points: 6,376