How to recover your ‘lost’ investment accounts

The most common way financial assets are forgotten, and then “escheated” by the state, is by not organizing your financial affairs and leaving investment accounts at multiple financial institutions. Escheat occurs when unclaimed financial assets, such as those in a bank or investment account, have been dormant for a long period of time. These assets are transferred to the state by financial institutions that have been unable to locate the owners of the accounts.

This can happen when you leave an employer and change jobs. For example, you might leave your 401(k) plan account at a previous employer and then open multiple IRA accounts in the future with different banks and brokerage firms. When you change jobs again, you might leave another 401(k) plan account with a different employer. At this point, you might have more accounts than you can keep track of and realize you have.

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The financial institutions will send you statements, but if your address changes and the financial institution is no longer able to find you, it can’t send you a statement. You are also risking what happens if the financial institution has some sort of glitch in its database and you no longer receive your statements. Once you stop receiving statements on multiple accounts, it is entirely possible to forget about the investments you own.

Another example is one that actually happened to me. I was keeping a close eye on the activity in a checking account I was closing. Because I had set up so many auto deductions to pay various bills, I took my time closing the account so it wouldn’t be overdrawn and generate overdraft fees.

As I was going through this process, I noticed that the account was being debited for a small amount of money every month by a company called Penn Mutual. I had never heard of Penn Mutual, so how was it possible that they were taking money out of my checking account every month?

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