escheatment

A requirement that financial institutions report to the appropriate state when a brokerage account or other investment has been abandoned or unclaimed after a certain period of time. Each state specifies the length of the inactive period. A firm must make a diligent effort to find the account owner. If the owner is not found after a certain period of time, the state claims the account through the escheatment process. The state can hold the account, or its sales proceeds, indefinitely. Some Web sites, such as the National Association of Unclaimed Property Administrators’ site, www.naupa.org, allow people to search for unclaimed property.