Escheatment is the process of identifying assets that have been abandoned, reporting these to the appropriate states, and finally transferring the abandoned assets over to the state. All states require unclaimed or abandoned property to be handed over to the state (generally the state of residence of the owner). The intent is to hold abandoned assets within a central authority (a state) where a property owner has an opportunity to find and reclaim their property. Escheatment laws apply to any asset, tangible, like real estate, or intangible, like mutual funds, bank or investment accounts. In the case of an investment in mutual funds, the state will ask the fund company to redeem the shares in an account that’s deemed to be abandoned and transfer all proceeds to the state.
There are many ways that assets are deemed ‘abandoned’ or ‘unclaimed’ and end up with a state, and it’s generally a welcomed event when an owner discovers or locates assets through a simple web search. There are times, however, when an owner is fully aware of their account or asset, and the property is escheated anyway. Each individual state determines what constitutes ‘abandonment’; there is no uniform standard. Fund companies must prove that account owners have transacted, logged in, called, voted a proxy, or taken a similar action in the recent past to demonstrate that an account remains ‘active’. We strongly encourage investors to maintain active contact with their accounts at least annually to ensure the account is not deemed to be abandoned.
How can I register ‘activity’ to ensure my account is not designated as abandoned?
State regulations vary on this matter, but doing one or more of the following each year will go a long way in demonstrating activity:
- Log in to Oppenheimerfunds.com with your unique User ID and password, review or update information if necessary
- Call OppenheimerFunds self-servicing option at 877.518.9631 and simply enter your social security number to register contact
- Check your account by calling into PhoneLink at 800.225.5677
- You may also write to us at: OppenheimerFunds Services, PO Box 5270, Denver CO 80217-5270.
What if I have Automatic Investments, Distribution Reinvestments or Automatic Withdrawals? Do these transactions count as activity?
Even investors that rely on systematic transactions may have their accounts designated as abandoned. Because these transactions are automated, they could conceivably continue without further instruction. As a result, depending on the current and future rules prescribed by individual states and territories, these transactions may not always register as contact or activity.
How long must an account be inactive before it is escheated to a state?
State regulations vary on this matter, and are subject to revision. We recommend conducting activity annually to ensure your account remains active. Also, ensure your mailing address and contact information remain current. Should your account show no activity, and be at risk of escheatment, we will attempt to contact you. If the address on your account is out of date and becomes RPO (Returned Post Office), your account can be deemed abandoned without delay.
What if I receive a notice about escheatment?
If you receive a notice indicating your account may be deemed ‘abandoned property’ under various state laws, please pay close attention to the instructions in the notification and make contact as soon as possible to ensure your account has not been abandoned.
What happens if my assets have already been escheated to the state?
Once assets are escheated, you must contact your state’s unclaimed property division to reclaim your assets.