ARTICLE TAKEAWAYS
Escheatment is the transfer of unclaimed property (abandoned property), accounts or unpaid checks to the state in which the investor or payee last resided. Regulations in all 50 states, the District of Columbia and U.S. territories require Capital Group to forward these assets after they have been unpaid or have remained dormant for a specified period of time. The time frames for escheatment vary from 1 to 7 years, depending on the property type and the investor’s or payee’s last state of residence.
What Capital Group does to prevent and resolve unclaimed property issues
Capital Group conducts required searches and mailings to comply with federal and state laws. Additionally, attempts may be made to re-establish contact with investors and/or their financial professional by mailing letters (and in some cases, also sending emails) to those who:
How financial professionals can help prevent and resolve unclaimed property issues
Encourage your clients to keep in contact with Capital Group. If you receive a letter about clients with unclaimed property, log in to DST Vision to record contact on behalf of your clients:
Note: Capital Group will be notified that contact has been recorded, but recording contact does not guarantee the clients’ assets will not be escheated. Some states may not recognize contact with a financial professional as sufficient to prevent an account from being deemed abandoned property.
Tax implications to clients
Traditional IRA accounts escheated to a state are considered taxable distributions and are:
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Use of this website is intended for U.S. residents only.
The guidelines and procedures provided in the Account Resource Center may not apply to networked accounts or accounts not directly held by American Funds. The guidelines and procedures provided also apply only to those retirement accounts or Coverdell ESAs invested in American Funds with Capital Bank and Trust Company (CB&T) as custodian. The guidelines and procedures provided in the Account Resource Center do not apply to plans held in our retirement plan solutions — PlanPremier, PlanPremier-TPA or RecordkeeperDirect. Information on the Account Resource Center may change periodically, and previously printed information may not be current. Please refer to capitalgroup.com for the most current information available.
Financial professionals should always contact their back office to determine if there are any restrictions on the use of American Funds products, tools, services, websites and literature.
This material does not constitute legal or tax advice. Investors should consult with their legal or tax advisors.