If you fail to contact the companies that manage your financial accounts every few years, the money in those accounts could be taken from you—by your state.

“Unclaimed property” laws require that financial institutions, including mutual funds, banks and insurers, forfeit “forgotten” accounts to state governments. These laws were enacted so that governments could safeguard overlooked assets until their rightful owners stepped forward to reclaim them—but the states soon realized that most of these assets were never reclaimed.

Previously, accounts were unlikely to be deemed unclaimed unless a financial institution could not reach the account holder for at least seven years after mail sent to the account holder was returned as undeliverable. Now these laws can claim accounts that were never forgotten at all. Accounts might be snatched up in as little as three years simply because the account holder has not called the financial institution or logged into a password-protected online account even if mail is not being returned. Contact your state’s Department of the Treasury to learn more about unclaimed property laws where you live.

Account holders can reclaim these assets—if they realize they have gone missing—but they still lose out on the dividends and capital gains their money did not earn while it was in state coffers. States’ liquidation of their investments can generate taxes and penalties, too.

What to do: Phone every financial institution where you have an account at least once every three years. Take this opportunity to discuss your accounts, or simply tell a representative, “I’m just calling to verify my contact information and get it on record that I have been in contact.” Logging into a password-protected account…and/or completing and returning a proxy ballot at least once every three years should prevent unclaimed property problems, too. Interacting with a financial company’s automated phone system typically will not.

Use MissingMoney.com to search every state in which you have ever lived to see if you have had assets snapped up. Check Delaware, Maryland and Massachusetts, too—occasionally assets are sent to the state in which the financial institution is based rather than the one where the account holder lives, and many financial companies are based in these three states.

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