Inactive Vanguard Accounts

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KlingKlang
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Inactive Vanguard Accounts

Post by KlingKlang » Wed Sep 13, 2017 6:30 pm

My mother has a couple of after-tax Vanguard accounts on which there has been no activity since 2009 (the year my father died).

Last week she received a phone call supposedly from Vanguard asking if she was going to vote her proxies. She hung up on them.

I just completed a proxy vote for an individual stock that I own. It contained the following notice :"Please note that state laws require shares of corporate stock or outstanding funds held in an account to be considered abandoned property if no written or electronic communication regarding the account has been made within the statutory timeframe (typically three to five years).

Is this something to worry about? If I vote her shares electronically will that count as communication?

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CAsage
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Re: Inactive Vanguard Accounts

Post by CAsage » Wed Sep 13, 2017 6:36 pm

Are the inactive accounts actually empty? If there is anything there, would you not want to manage it somehow? I would be surprised a zero value account had a vote.

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KlingKlang
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Re: Inactive Vanguard Accounts

Post by KlingKlang » Wed Sep 13, 2017 6:44 pm

CAsage wrote:
Wed Sep 13, 2017 6:36 pm
Are the inactive accounts actually empty? If there is anything there, would you not want to manage it somehow? I would be surprised a zero value account had a vote.
Actually they have about $400K in them. She doesn't understand anything about them except for the name Vanguard. I'm the co-owner so I can see the balances on my own account list but not perform any activities.

ResearchMed
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Re: Inactive Vanguard Accounts

Post by ResearchMed » Wed Sep 13, 2017 6:55 pm

KlingKlang wrote:
Wed Sep 13, 2017 6:44 pm
CAsage wrote:
Wed Sep 13, 2017 6:36 pm
Are the inactive accounts actually empty? If there is anything there, would you not want to manage it somehow? I would be surprised a zero value account had a vote.
Actually they have about $400K in them. She doesn't understand anything about them except for the name Vanguard. I'm the co-owner so I can see the balances on my own account list but not perform any activities.
Can you help her log in and at least do one small transaction?

Otherwise, you/she will run the risk that the money will be turned over to the State's abandoned money fund.
Yes, you'll be able to get it back, but why bother with that in the future?

RM
This signature is a placebo. You are in the control group.

cas
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Re: Inactive Vanguard Accounts

Post by cas » Wed Sep 13, 2017 7:05 pm

Are the accounts IRAs or taxable? [Edit: whoops. Now I see you said after-tax.]

I was once trying to figure out why HSA accounts are much more subject to unpleasant inactivity surprises than the brokerage/mutual fund accounts I was used to and found the info below. (A google search is the sum total of my knowledge, so don't put much weight on this post.)
Because IRAs are meant to sit relatively inactive for long periods during the accumulation phase, which is typically the owner's working years during which the account accrues interest, they are not subject to escheatment in the same way as other assets. Rather than being vulnerable to a state claim after a few years of inactivity, the dormancy period for IRAs cannot begin until the account owner reaches the age at which he must begin taking required minimum distributions (RMD), usually 70.5.

If state law sets the dormancy period at three years, for example, an IRA can be escheated if the account owner reaches age 73.5 without taking any distributions or logging any activity with the financial institution, and the institution is unable to contact him at the address listed on his account.

Roth IRAs are often not subject to escheatment because they typically do not carry RMD requirements.
Source: http://www.investopedia.com/ask/answers ... s-iras.asp

If the accounts are taxable ... I have no idea.

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KlingKlang
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Re: Inactive Vanguard Accounts

Post by KlingKlang » Wed Sep 13, 2017 7:11 pm

I went ahead and voted her proxy online. Tomorrow I'll get in touch with my Flagship rep and see what he says.

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