Here is some investment advice you probably haven’t heard before: If you own stock, occasionally log in and jiggle the handle.Otherwise, depending on where you live, a state may eventually decide that you have abandoned your investment.Not because you died.
Not because anyone proved you moved away.Not necessarily because your mail was returned.
You may still be receiving statements.Your dividends may still be landing automatically in your bank account.
You simply haven’t done anything lately.That distinction sounds absurd.It is becoming increasingly important.THE RICH HAVE ONE FINANCIAL HABIT MOST AMERICANS IGNORE AT THEIR PERILOver the last few years, states have quietly been rewriting unclaimed-property laws in ways that make securities easier to declare abandoned.
The clock has gotten shorter and the definition of "abandoned" has gotten broader.Governments can seize your accounts just because you aren't actively using them.(CyberGuy.com)Computershare, one of the country's largest stock transfer agents, says there was a time when most states waited seven years before treating stock as abandoned.
Today, more than half use three years.Even more consequential, states have increasingly shifted from a "lost" standard, such as returned mail, to an "inactivity" standard.
Computershare itself calls the trend "unfortunate."Think about what changed.Under the old logic, the government was essentially saying: We can't find you.Under the new logic, it can be: You haven't contacted us lately.
That is a radically lower bar for taking custody of somebody's investment.WE ALL ARE DESPERATE FOR A FINANCIAL CHECK-UP.TIME TO SAY, ‘SHOW ME THE MONEY!’And for the investor who follows the most basic rule of long-term investing, buy good companies and leave them alone, it creates a bizarre trap.
Computershare warns investors that merely receiving statements or having dividends automatically deposited may not qualify as sufficient activity under some state laws.In other wor...