Escheatment of Shares
What happens if a stock holding is left dormant for a long period of time or if mail is going undelivered at an old address?
Occasionally with US stocks especially where the shareholder is deceased and the asset held went unknown or the transfer agent is not advised of a change of address, there is a strong possibility that dividends/interest payments or in some cases the shareholding itself has been escheated back to the state of issue.
In this scenario the shares would normally be sold as at the market price on the date of escheatment and the monies would have to be claimed directly from the state of the incorporation of the issuing company (often Delaware), this happens when there is no contact from the shareholder over a number of months/years or the transfer agent receives three or more items of returning mail from the registered address, once stocks or payments are escheated the Transfer agent is no longer responsible for them.
How to deal with Escheated Shares
The main problem with escheatment is that It can take several months sometimes years to claim back the asset(s), at IWC we can also deal with obtaining monies back from the states in the USA in the event that a deceased or a living individuals stock has been escheated.
It is incredibly important that you keep in touch with the transfer agent, a common cause of escheatment comes from holders who have a dividend re-investment plan registered on their shareholding, meaning that cheques are not received for dividends, if a cheque is received and cashed then that is classed as activity and the holding will not be considered for escheatment, however dividends being re-invested into further shares does not count as activity from the shareholder and if no other contact is made with the transfer agent the shares are vulnerable to escheatment laws.
If you require assistance with claiming back abandoned property from a state or with any of our services please do not hesitate to contact us for a quote and further information on the services we can offer by either telephoning us on 020 8150 2010 or by emailing firstname.lastname@example.org.