Unclaimed Property and Escheatment FAQ
What is escheatment?
Escheatment refers to the act of turning over unclaimed or abandoned property to the state of the owner’s last known address. Escheatment laws are set by each state, and the definition of abandoned property can vary by state. Financial institutions like Columbia Threadneedle Investments are required to follow the specific requirements of each state’s escheatment laws.
What is unclaimed or abandoned property?
For purposes of escheatment, states define unclaimed or abandoned property as one or a combination of the following:
- Financial accounts with no activity or contact initiated by its owner.
- Financial accounts with an address deemed undeliverable by the United States Postal Service.
- Uncashed checks.
Please note that ‘activity” and “contact” are defined by each state. Importantly, automated features on an account (such as regular, ongoing purchases or redemptions, or reinvestment of dividends) do not necessarily count as contact, so such activity might not protect your client’s account from state escheatment law.
When is abandoned property escheated?
Each state has laws that require financial institutions, including Columbia Threadneedle Investments, to turn over abandoned property to the state’s unclaimed property department after a set period of dormancy, which is the period of time before property will be considered to be abandoned. Most often, property is considered abandoned after a period of 3 to 5 years of inactivity or “no contact”. Columbia Threadneedle will attempt to locate your client prior to the escheatment process.
How can I prevent my client’s assets from being escheated?
The best way to prevent your client’s assets from being escheated is to make regular contact on their account and to review annually their personal account information for accuracy.
Many states have added “inactivity” or the absence of customer-initiated contact as a component for determining abandoned property. These regulations require an advisor to contact fund companies on a regular basis to prevent their client’s account(s) from being deemed dormant.
What methods can I use to establish contact for my client?
Online: You can establish contact for your client on DST Vision. To access, please visit www.dstvision.com. You will need your Vision ID and password to Sign-In. Contact the Vision Support Desk at (800) 435-4112 for technical support.
Shareholder Account Services: Call 866.840.5469 to speak with an investor services representative, Monday through Friday between 8:00 AM to 5:00 PM ET.
Mail: You can mail us a letter, stating that you are initiating contact on your client’s account(s) with Columbia Threadneedle. Mail the letter to: Columbia Management Investment Services Corp. P.O. Box 219104 Kansas City, MO 64121-9104.
What methods can my client use to establish contact?
In addition to the methods available to you (excluding the online option above), your client may use one of the methods below:
Online: Accessing their online account will establish contact and allow us to record their account(s) as active. Visit www.columbiathreadneedleus.com/investor. First-time users will need to establish an online account as a “New User?”. They will need their fund and account number, Social Security Number (SSN) or Tax Identification Number (TIN), name, and email address associated with their account.
Customer Connection: Customer Connection is an automated phone system that gives your client 24-hour access to their account(s) and supports speech recognition. To access, they can dial 800.345.6611. First-time users will need to establish a Personal Identification Number (PIN). They will need their fund and account number, and SSN or TIN associated with their account.
What if my client has more than one account, do I need to establish contact on all their accounts?
No, establishing contact on one account will qualify as contact on all accounts registered under the same primary Social Security Number or Tax Identification Number.
Where does a client’s assets go if escheated?
Unclaimed property assets turned over to the state are held for their rightful owner to claim. Each state holds and uses the assets in accordance with their individual state statutes.
Please note that states require fund companies, including Columbia Threadneedle Investments, to redeem abandoned fund shares and turn over the redemption proceeds in cash. Shareholders who reclaim their assets from a state will receive the dollar amount of the redemption but will not receive any dividends, interest or market appreciation that may otherwise have been earned on their investment if the shares had not been redeemed. It is therefore very important that you or your client maintain contact with Columbia Threadneedle as described above.
Additionally, please note that under IRS rules, the escheatment of traditional IRA accounts are subject to federal and state tax withholding rules for IRAs.
Click here to search for unclaimed property in your state.
Where can I get further information regarding the escheatment process?
Click here to visit the U.S. Securities and Exchange Commission’s (SEC) website for more information about escheatment.
Click here to visit the National Association of Unclaimed Property Administrators’ (NAUPA) website for more information about the escheatment rules that apply in your state.
Click here to visit the Investment Company Institute’s (ICI) website for more information about lost property.