Funds are transferred to the state when a bank sees no activity and there is no communication. Financial Planner, Richard Rosso, says in many cases, someone has died or moved. “The organization goes, well what’s wrong and sends a letter. Then it gives you a period of time and then it will escheat to the state.” Rosso said.
He says companies do a lot of due diligence to try to find the owner before they escheat the asset. Rosso says some companies wait 1-2 years and some wait 5, 6, 7 years. There must be a lot of inactivity for an extended period of time.
“Everyone in these organizations is required by law to send a letter saying if you don’t contact us within a certain amount of time, let the consumer know they must. Companies like Vanguard and Fidelity will reach out and send letters repeatedly.” He said.
If this does happen, you can search your state’s “unclaimed property.” He says the money stays on file almost forever.