Schulfer & Associates, LLC

Escheatment and Your Investments

I had a new client recently come to me for help on his and his wife’s IRA accounts.  He said he didn’t have time to keep up on the investments and wanted to make sure that the accounts didn’t inadvertently end up in escheatment as unclaimed property someday to the State of Wisconsin.

According to the Wisconsin Department of Revenue(1),  “Property becomes unclaimed or abandoned?? when there isn't owner? activity???? on the account for a period of one to five years (depending upon the type of property) and is reportable to the Department of Revenue (DOR) if the holder of the asset does not make contact with the owner as a result of due diligence. A holder?? may include a bank, savings institution, credit union, securities brokerage firm, mutual fund company, insurance company, business or utility company.”  The DOR makes efforts to find the rightful owners, however, if the property remains unclaimed the investments will be sold.  By law, the DOR is required to hold all securities for just one year before they are relinquished by sale.

The DOR site further states, “The law was enacted in 1970 to allow Wisconsin residents to search one place for missing funds. After one to five years of inactivity??, Wisconsin businesses are required to turn over all unclaimed money, stock, and safe deposit box contents to DOR.” and “This process relieves businesses from the expense and liability associated with carrying unclaimed property on their financial records.” 

Over time, losing track of an account can happen easier than you may think.  How can you avoid escheatment?  Having an active relationship with a personal advisor or your financial institution is a great start.  “I want someone who knows me and knows my family” is a statement I often hear from new clients.  Be sure your address and phone number is up to date on all of your accounts.  Update account titles following marriage, divorce, death of a spouse or name change.   Consolidating is also helpful; you can combine accounts with like registrations when it makes sense.  When you leave a job, consider what to do with your employer sponsored retirement account.  Options are leaving as is, combining with another employer sponsored retirement account, directly rolling the account over to your own IRA or cashing it out.  Keep an inventory of your accounts.  Make sure your beneficiaries know who to contact when you pass away, as it is their responsibility to do so.

Visit https://www.revenue.wi.gov/Pages/UnclaimedProperty/Home.aspx for more information, including a search feature to see if there is unclaimed property in your name.

(1) https://www.revenue.wi.gov/Pages/FAQS/ucp-unclaimed-property.aspx

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. You should discuss your specific situation with the appropriate professional before making any decision.

 

LouAnn Schulfer is co-owner of Schulfer & Associates, LLC Financial Professionals and can be reached at (715) 343-9600 or louann.schulfer@lpl.com.  www.SchulferAndAssociates.com

Securities and advisory services offered through LPL Financial, a Registered Investment Advisor.  Member FINRA/SIPC.