The silent threat to your portfolio
Most financial advisors give the same core advice: diversify your portfolio, stick to your plan, and don’t obsess over daily market swings. For millions of Americans, "setting it and forgetting it" is the cornerstone of building long-term wealth.
The problem? State government rules target patient investors.
Two competing standards
States determine if an account is "abandoned" using one of two rules:
- The inactivity standard: If you don't log in or trade for a few years, the state can label your account abandoned, even if you still live at the same address and receive your statements. This penalizes buy-and-hold investors for simply letting their money grow.
- The returned-communication standard: Your account is only marked as abandoned if official mail or emails bounce back as undeliverable. As long as communications reach you, your investments remain safe.
Current inactivity standards are a direct threat to everyday investors, allowing states to seize active financial accounts simply due to lack of recent logins. Adopting a returned communication standard can solve that problem. States need a returned communication standard to protect investors and stop unnecessary account seizures.
A patchwork of risk across the states
Because unclaimed property policy is set at the state level, your protection against premature account seizures depends entirely on where you live. State rules for long-term investments vary drastically
- Florida fixed a costly mistake for investors: In 2024, a change in state law led to Florida prematurely taking over $1 billion in financial assets from active accounts. Realizing the error, state lawmakers changed the rules in June 2026. Under the new law, Florida can no longer claim an account as "abandoned" as long as the investor stays in contact or shows basic account activity over the required timeline. This fix ensures long-term, buy-and-hold investors aren't penalized just for leaving their investments untouched.
- California puts investors at risk: A few California lawmakers recently pursued a proposal that threatened to expand state account seizures —even when owners were actively receiving statements. While that bill thankfully did not pass, the state still lacks clear safeguards for long-term investors. The state must establish a returned-communication standard, legislation that would ensure that accounts belonging to California’s 7.8 million mutual fund and ETF holders are only classified as abandoned when communications are proven undeliverable.
Recent progress offers temporary relief, with states like Florida cleaning up a costly escheatment mistake and California narrowly avoiding harmful legislation. However, ongoing state-by-state legislative battles still leave millions of American families exposed to shifting legal definitions of "abandoned" property.
A uniform federal solution
Federal legislation would prevent financial institutions and states from escheating or liquidating securities solely due to account inactivity—ensuring reachable investors retain control of their assets.
Three simple steps to protect your nest egg
- Check your state’s unclaimed property program to see if the state is holding any of your property.
- Let your family and friends know that their assets could be claimed by the state.
- Contact your state lawmakers and let them know you support investor-first unclaimed property laws.
Now is our opportunity to protect your hard-earned savings and defend your financial future.
