Picture this: You’re driving down a highway, windows down, music blasting, and your arm is hanging out the window. In your hand is a stack of $100 bills that you’re releasing into the wind as you go.
Would you EVER do that? No! But that’s the image I get in my head any time I speak with someone who “thinks” they have a 401k with a former employer from 15 years ago, or they vaguely recall having their 401k rolled into an IRA on their behalf after leaving an employer, but they don’t remember any details about it.
Just as you wouldn’t intentionally let cash blow out your car window, you shouldn’t let old retirement accounts slip through your fingers only to be forgotten in the years ahead.
Still, it happens. The office of Florida’s Chief Financial Officer Jimmy Patronis holds $2 billion in unclaimed property, mostly from dormant accounts in financial institutions, insurance and utility companies, and securities and trust holdings, according to MyFLoridaCFO.com.
Unclaimed property is a financial asset that is unknown or lost, or has been left inactive, unclaimed or abandoned by its owner.
How do investment accounts end up as unclaimed property?
Beside the examples stated above there’s another way that clients may lose track of their retirement accounts. I recently took over some accounts from other advisors and realized a few of them lacked a working phone number, email address or mailing address. All the accounts were retirement plans from previous employers.
Clients change jobs and contacts sometimes become outdated. As the new advisor on these accounts, I find myself dusting off my former news reporter skills as I try to reestablish contact because here’s what I’m eager to avoid: Escheatment.
Escheatment is the process of transferring assets to the state. Escheat rights are often revocable, which means that asset ownership could revert to a lawful heir or owner should one turn up, according to Investopedia.
If a client’s account is escheated, the account is zeroed out and the funds are transferred to the state in which it is registered. To reclaim the funds, the client must contact the state to which the account was escheated and request they be returned.
Florida statutes require the unclaimed accounts to be held by business or government entities (holders) for a set period of time- usually five years. If the holder is unable to locate and reestablish contact with the owner and return the asset, it is reported and remitted to the Florida Department of Financial Services, according to FLTreasureHunt.gov, the website where citizens can search the database to see if they have unclaimed property.
How do I prevent my accounts from becoming labeled as unclaimed property?
- Communicate with the financial advisor who manages your account and update your contact information when it changes.
- List a trusted contact on your account so that if we can’t reach you, we can let your trusted contact know we need you to call us.
- When you leave a job, speak with a financial advisor to determine whether you should rollover your old employer plan into an IRA in your name or into your new employer’s retirement plan.
The average person has about 12 jobs in their lifetime, according to the U.S. Bureau of Labor Statistics. That could be a lot of retirement plans to keep up with throughout your working years. Establishing an IRA may be a good idea so you have one place to transfer your retirement assets any time you change jobs.
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Please call me if you wish to discuss options for your old retirement accounts: (863) 616-6040.
July 2025