Escheatment involves accounts that have been abandoned or are unclaimed and inactive. As the SEC explains, 'All states require financial institutions, including broker¬age firms, to report when personal property has been abandoned or unclaimed after a period of time specified by state law often five years. Before a brokerage account can be considered abandoned or unclaimed, the firm must make a diligent effort to try to locate the account owner. If the firm is unable to do so, and the account has remained inactive for the period of time specified by state law, the firm must report the account to the state where the account is held. The state then claims the account through a process called escheatment, whereby the state becomes the owner of the account.
As part of the escheatment process, the state will hold the account as a bookkeeping entry, against which the former account owner may make a claim. States tend to sell the securities in escheated accounts and treat the proceeds as state funds. When a former account owner makes a valid request, however, the states will normally provide the former owner with cash equaling the value of the account at the time of escheatment. This amount of cash does not include any dividends or interest covering the time after escheatment."
There are websites, both free and commercial, that allow people to check for any unclaimed accounts in their name. One free site allows visitors to search for accounts by state, at https://www.unclaimed.org/.
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