Escheatment is the process of turning over unclaimed or abandoned property to a state authority. Escheatment laws require mutual funds to turn over uncashed checks and/or client account fund shares if the owner cannot be located within a length of time determined by each state.
Unclaimed property is any financial asset with no activity by its owner for an extended period of time. (The definition of “activity” varies by state.) This includes mutual fund accounts, savings accounts, checking accounts, unpaid wages or commissions, stocks, underlying shares, uncashed dividend checks, paid-up life insurance policies, safe deposit boxes, and uncashed benefit checks, gift certificates, etc.
The states have unclaimed property laws to:
- Protect the property rights of owners and reunite them with their funds
- Provide a central point of contact for owners to claim unclaimed funds