How Unclaimed Property Laws Can Affect Retirees

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MikeG62
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How Unclaimed Property Laws Can Affect Retirees

Post by MikeG62 » Wed Jul 18, 2018 11:15 am

Read this article yesterday which I thought I'd share.

https://www.forbes.com/sites/jamiehopki ... 3cb47352b8

A few key excerpts...

"In 2016, Pennsylvania enacted an unclaimed property rule that essentially treats retirement accounts no differently than all other accounts. After just three years of inactivity, regardless of the account holder’s age, the account will now qualify as unclaimed property...If you think this rule doesn’t impact you because you don’t live in Pennsylvania, think again. Since the rule requires financial institutions to report the abandoned property, it applies to the financial institutions in Pennsylvania, specifically mutual-fund giant Vanguard.

This new law in Pennsylvania, which was widely criticized as a deviation from standard practices and removed protections for investors that typically allow retirement accounts to be protected from escheatment until much later, typically age 70.5. This change puts a substantial burden on anyone with accounts held in Pennsylvania.

...after receiving feedback from various stakeholders, Pennsylvania Treasury published Policy Guidance suspending enforcement of portions of the law relating to the abandonment of retirement accounts until further guidance is issued by the Treasury or the law is changed. This appears to be a commonsense response but the fact remains that the law is still on the books."


Here is what caught my eye...

This means you should continue to log into your accounts every year, check the balances, and make sure your contact information is current. It’s also a good idea to make sure you know the definition of “inactive” that applies to your accounts. For instance, automatically reinvested dividends or interest may not be enough to qualify to keep your account in “active” status on their own, even though additional shares are being purchased on an ongoing basis. The same may also be true of automatically recurring distributions sent to banks or other accounts..

So my reason for posting this article is more about the bold and underlined wording above. I worry not so much for my accounts as for my DW's accounts (really just her Roth). She never bothers responding to proxy vote requests nor bothers with the account in any way. I log in once a month to download her current statement (which I'd think is enough for the account to be considered active), but that is about it. Maybe there are others in the same position or yet others who get paper statements in the mail and don't log in at all (with otherwise no activity besides dividends being posted).

It seems a "set it and forget about it" approach with any financial accounts potentially runs the risk of these crazy unclaimed property laws.

BTW, I am not posting this as a means of fear mongering - I am not about that.
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texasdiver
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Re: How Unclaimed Property Laws Can Affect Retirees

Post by texasdiver » Wed Jul 18, 2018 11:28 am

This seems like a very good reason to consolidate accounts if, like most Americans, you have worked for various employers over the years and have legacy 401k accounts scattered around. Between my wife and me, we would have over 15 different retirement accounts by now had we not been diligent about continually rolling them up and consolidating as we change jobs. In some cases it wasn’t even a job change, the employer changed plans and sometimes had multiple plans.

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Re: How Unclaimed Property Laws Can Affect Retirees

Post by Jack FFR1846 » Wed Jul 18, 2018 11:39 am

What a horribly stupid thing. I've sent my first secure message ever to Vanguard asking that they tell me what I can legally do to keep my account "active". Also, what would define an account as "inactive".
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ResearchMed
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Re: How Unclaimed Property Laws Can Affect Retirees

Post by ResearchMed » Wed Jul 18, 2018 11:51 am

Does simply logging in to check balances (or just that the money is still there) count?
Or does one need to make changes to something?

IF automatic distributions, such as RMD's do NOT count.. WOW... this is a time bomb waiting to zap a lot of people, and older people disproportionately.

I see they aren't enforcing this just yet for retirement accounts, but a) when will that change, and b) what's the chance of a mistake and doing it to one/some/many accounts anyway?

:shock:

RM
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Re: How Unclaimed Property Laws Can Affect Retirees

Post by pshonore » Wed Jul 18, 2018 12:02 pm

ResearchMed wrote:
Wed Jul 18, 2018 11:51 am
Does simply logging in to check balances (or just that the money is still there) count?
Or does one need to make changes to something?

IF automatic distributions, such as RMD's do NOT count.. WOW... this is a time bomb waiting to zap a lot of people, and older people disproportionately.

I see they aren't enforcing this just yet for retirement accounts, but a) when will that change, and b) what's the chance of a mistake and doing it to one/some/many accounts anyway?

:shock:

RM
Got a note a few months from TDBank that my checking account (a small one with $300 balance to get a discounted rate on HELOC) had been inactive and was "in danger" (even though they gave me a penny or two every month in interest). I made a $10 deposit to ward off the escheat folks.

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Re: How Unclaimed Property Laws Can Affect Retirees

Post by Jack FFR1846 » Wed Jul 18, 2018 12:06 pm

What I'm concerned about is that the Commonwealth of Pennsylvania defines "active" and "inactive". When it comes to government, I would never assume that logic or fairness is going to be considered. I'm happy to say that Vanguard sent me an automatic email telling me they got my message and will get around to answering it someday. Cool.
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Re: How Unclaimed Property Laws Can Affect Retirees

Post by PVW » Wed Jul 18, 2018 12:08 pm

Keep your contact information up to date. Pennsylvania is required to notify the owner before they take control of unclaimed property. This is an important piece of information that should have been included in the forbes article.

http://www.klgates.com/new-amendments-t ... 7-27-2016/

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Abe
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Re: How Unclaimed Property Laws Can Affect Retirees

Post by Abe » Wed Jul 18, 2018 12:28 pm

After reading this thread, I went to my states unclaimed property site and entered my last name in the search box. To my surprise my wifes name came up and it said she had $57,639.87 in unclaimed property. I did some checking and found that Capital One 360 had closed her savings account and sent the proceeds to my states unclaimed property division. I don't know how this happened because I called them before they closed the account and they told me everything was okay and I didn't need to do anything. I just sent in the claim form today to get the money from the state. :annoyed
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Re: How Unclaimed Property Laws Can Affect Retirees

Post by MikeG62 » Wed Jul 18, 2018 12:44 pm

Abe wrote:
Wed Jul 18, 2018 12:28 pm
After reading this thread, I went to my states unclaimed property site and entered my last name in the search box. To my surprise my wifes name came up and it said she had $57,639.87 in unclaimed property. I did some checking and found that Capital One 360 had closed her savings account and sent the proceeds to my states unclaimed property division. I don't know how this happened because I called them before they closed the account and they told me everything was okay and I didn't need to do anything. I just sent in the claim form today to get the money from the state. :annoyed
WOW! That is frightening. Any idea why Capital One considered the account “inactive”?
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Re: How Unclaimed Property Laws Can Affect Retirees

Post by GoldStar » Wed Jul 18, 2018 12:49 pm

I am sure Vanguard will send out many multiple notices (like banks do today) before marking an account inactive and turning in the proceeds. Just make sure you keep you info (email, phone, address) current and don't worry.

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Abe
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Re: How Unclaimed Property Laws Can Affect Retirees

Post by Abe » Wed Jul 18, 2018 12:52 pm

MikeG62 wrote:
Wed Jul 18, 2018 12:44 pm
Abe wrote:
Wed Jul 18, 2018 12:28 pm
After reading this thread, I went to my states unclaimed property site and entered my last name in the search box. To my surprise my wifes name came up and it said she had $57,639.87 in unclaimed property. I did some checking and found that Capital One 360 had closed her savings account and sent the proceeds to my states unclaimed property division. I don't know how this happened because I called them before they closed the account and they told me everything was okay and I didn't need to do anything. I just sent in the claim form today to get the money from the state. :annoyed
WOW! That is frightening. Any idea why Capital One considered the account “inactive”?
I got a letter from them saying, "It's been at least 3 years since we've heard from you. And unfortunately, if we don't hear from you within the next 60 days, your account(s) will be considered "abandoned." State law says we have to turn over abandoned accounts to the (my state) division of unclaimed property. We don't want this to happen."

After receiving the letter, I called them and updated the account. They told me that was all I needed to do. Apparently whoever told me that didn't know what they were talking about.
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Re: How Unclaimed Property Laws Can Affect Retirees

Post by baconavocado » Wed Jul 18, 2018 1:19 pm

Abe wrote:
Wed Jul 18, 2018 12:52 pm
MikeG62 wrote:
Wed Jul 18, 2018 12:44 pm
Abe wrote:
Wed Jul 18, 2018 12:28 pm
After reading this thread, I went to my states unclaimed property site and entered my last name in the search box. To my surprise my wifes name came up and it said she had $57,639.87 in unclaimed property. I did some checking and found that Capital One 360 had closed her savings account and sent the proceeds to my states unclaimed property division. I don't know how this happened because I called them before they closed the account and they told me everything was okay and I didn't need to do anything. I just sent in the claim form today to get the money from the state. :annoyed
WOW! That is frightening. Any idea why Capital One considered the account “inactive”?
I got a letter from them saying, "It's been at least 3 years since we've heard from you. And unfortunately, if we don't hear from you within the next 60 days, your account(s) will be considered "abandoned." State law says we have to turn over abandoned accounts to the (my state) division of unclaimed property. We don't want this to happen."

After receiving the letter, I called them and updated the account. They told me that was all I needed to do. Apparently whoever told me that didn't know what they were talking about.
I checked the state unclaimed property web site as well and found a $10 refund check that was listed for me under my current name at my current address. It was one year old. Why didn't they just send it to me?

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Re: How Unclaimed Property Laws Can Affect Retirees

Post by mouses » Wed Jul 18, 2018 1:20 pm

I keep a list of my accounts subject to "inactivity," and make sure I do something to them every six months or so. At least with the ones I have, chatting to the credit union or printing off statements does not count as activity, neither does automatic stuff.

However they have assured me that CDs will not get shipped off to the state as long as the share account has activity. So every so often I deposit $5 or so in them. So far this has worked out.

With the OP's news, I am not sure what to do with the Vanguard (and Schwab if it comes to that) accounts as mine are IRAs. I guess I could take out $5 once a year or something.

This activity inactivity stuff is really stupid.

The credit unions tell me they send out warning letters, but I'm not counting on that.

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Re: How Unclaimed Property Laws Can Affect Retirees

Post by Ping Pong » Wed Jul 18, 2018 1:22 pm

How should we keep pensions active? I have a pension that wont have any activity for another couple of decades. I’m not even allowed to create any activity in it before then.

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Re: How Unclaimed Property Laws Can Affect Retirees

Post by ResearchMed » Wed Jul 18, 2018 1:26 pm

If they are IRA's with zero activity, what about the taxes?

Do they just withhold (at max tax rate?) and send the rest to the state?
And what about penalties for those "underage"?

And what about money in 403b/etc., plans - money that cannot be removed per rules?

RM
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Re: How Unclaimed Property Laws Can Affect Retirees

Post by MikeG62 » Wed Jul 18, 2018 1:56 pm

ResearchMed wrote:
Wed Jul 18, 2018 1:26 pm
If they are IRA's with zero activity, what about the taxes?

Do they just withhold (at max tax rate?) and send the rest to the state?
And what about penalties for those "underage"?

And what about money in 403b/etc., plans - money that cannot be removed per rules?

RM
This was stated in the article WRT your question:

"...if the state takes your unclaimed IRA or 401(k), it essentially liquidates the account and takes the money out of the tax-deferred shelter. In this event, the unclaimed property now becomes subject to income taxes. Even if the individual finds an unclaimed retirement account property later on, there will likely be substantial back taxes to be paid, and the tax-deferred nature of the retirement account will have been lost."
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Whakamole
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Re: How Unclaimed Property Laws Can Affect Retirees

Post by Whakamole » Wed Jul 18, 2018 2:00 pm

MikeG62 wrote:
Wed Jul 18, 2018 1:56 pm
ResearchMed wrote:
Wed Jul 18, 2018 1:26 pm
If they are IRA's with zero activity, what about the taxes?

Do they just withhold (at max tax rate?) and send the rest to the state?
And what about penalties for those "underage"?

And what about money in 403b/etc., plans - money that cannot be removed per rules?

RM
This was stated in the article WRT your question:

"...if the state takes your unclaimed IRA or 401(k), it essentially liquidates the account and takes the money out of the tax-deferred shelter. In this event, the unclaimed property now becomes subject to income taxes. Even if the individual finds an unclaimed retirement account property later on, there will likely be substantial back taxes to be paid, and the tax-deferred nature of the retirement account will have been lost."
Presumably the taxes would be due for the year that the account was liquidated and you'd have to file an amended tax return - and perhaps owe penalties.

This law was certainly well thought-out. I think perhaps they were trying to combat what happened with the Steadman funds.

ResearchMed
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Re: How Unclaimed Property Laws Can Affect Retirees

Post by ResearchMed » Wed Jul 18, 2018 2:03 pm

MikeG62 wrote:
Wed Jul 18, 2018 1:56 pm
ResearchMed wrote:
Wed Jul 18, 2018 1:26 pm
If they are IRA's with zero activity, what about the taxes?

Do they just withhold (at max tax rate?) and send the rest to the state?
And what about penalties for those "underage"?

And what about money in 403b/etc., plans - money that cannot be removed per rules?

RM
This was stated in the article WRT your question:

"...if the state takes your unclaimed IRA or 401(k), it essentially liquidates the account and takes the money out of the tax-deferred shelter. In this event, the unclaimed property now becomes subject to income taxes. Even if the individual finds an unclaimed retirement account property later on, there will likely be substantial back taxes to be paid, and the tax-deferred nature of the retirement account will have been lost."
Well, is this a "back door" way to get money out of a 403b account where ordinarily NO distributions/withdrawals are allowed until retirement (or less than half time)?

DH is still working, way past regular "retirement age".
We'd LOVE to get our hands on a bit of that money :happy

We could stop adjusting the Vanguard portion of the 403b and make any adjustments at Fidelity or TIAA....

:confused

RM
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MikeG62
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Re: How Unclaimed Property Laws Can Affect Retirees

Post by MikeG62 » Wed Jul 18, 2018 2:28 pm

Jack FFR1846 wrote:
Wed Jul 18, 2018 11:39 am
What a horribly stupid thing. I've sent my first secure message ever to Vanguard asking that they tell me what I can legally do to keep my account "active". Also, what would define an account as "inactive".
Good idea Jack. I just did the same thing with my private client rep over at Fidelity. Asked for a response in writing covering all of the accounts types I have with them (brokerage, Traditional IRA, Rollover IRA and Roth IRA) - preferably Fidelity's written policy on active vs inactive accounts.

Edited to add this information I found perusing Fidelity's website:

Fidelity attempts to notify you to confirm we have your correct address and contact information to prevent your assets from being identified as abandoned. Abandoned assets (including your accounts and/or uncashed checks issued from your accounts) may be at risk to be sent to your state's unclaimed property division.

Typically, if the owner of the assets does not take action on his property for a certain period of time, usually a three- or five-year period depending on the state's laws and property type, the assets might be considered abandoned. Based on your state's guidelines, your assets might be considered abandoned or unclaimed if any, or all, of these conditions exist:

Returned mail—the U.S. Post Office returns the mail we've sent to your address as undeliverable.
Uncashed checks—the checks issued from your account haven't been cashed.
Inactivity—the account owners haven't contacted Fidelity or had any account activity for a long time.

Note: Contact and activity can include, but aren't limited to, logging in to your account on Fidelity.com, calling a representative who is on a recorded telephone line, or completing certain maintenance activities and/or transactions.

If your state—based on its laws and the property type—determines your assets are abandoned, the assets may be turned over to the state.


Don't really like the "any" language. What if mail (though no fault of your own) was returned to Fidelity? Even though you had been logging into your account, you'd still appear to meet the "any" criteria for escheatment.

Also, who uses checks as a means to remove funds from their financial institution anymore? - I've been using the ACH to transfer funds for well over a decade. Feels like they need to update their policy statement.
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AlwaysWannaLearn
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Re: How Unclaimed Property Laws Can Affect Retirees

Post by AlwaysWannaLearn » Wed Jul 18, 2018 2:48 pm

.....
Last edited by AlwaysWannaLearn on Wed Jul 18, 2018 9:42 pm, edited 1 time in total.

lakpr
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Re: How Unclaimed Property Laws Can Affect Retirees

Post by lakpr » Wed Jul 18, 2018 4:01 pm

Does periodic re-balancing of the account balances count as activity? I hope it does ..

This thread has me worried.

My former employer's 401-k is with Vanguard, and I left that job more than 3 years ago; coming up on the 4th year anniversary in September. Didn't move the money out due to backdoor-Roth considerations, and my current employer does not accept incoming 401-k funds. Best I can do is periodic re-balancing to show activity

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Re: How Unclaimed Property Laws Can Affect Retirees

Post by SuzBanyan » Wed Jul 18, 2018 4:09 pm

MikeG62 wrote:
Wed Jul 18, 2018 1:56 pm
ResearchMed wrote:
Wed Jul 18, 2018 1:26 pm
If they are IRA's with zero activity, what about the taxes?

Do they just withhold (at max tax rate?) and send the rest to the state?
And what about penalties for those "underage"?

And what about money in 403b/etc., plans - money that cannot be removed per rules?

RM
This was stated in the article WRT your question:

"...if the state takes your unclaimed IRA or 401(k), it essentially liquidates the account and takes the money out of the tax-deferred shelter. In this event, the unclaimed property now becomes subject to income taxes. Even if the individual finds an unclaimed retirement account property later on, there will likely be substantial back taxes to be paid, and the tax-deferred nature of the retirement account will have been lost."
Contrary to the statement in the article quoted above in the article, apparently Pennsylvania takes the position that an unclaimed retirement account is a “trustee-to-trustee” transfer:

“The provisions of Section 1301.8 directing the transfer of abandoned and unclaimed retirement accounts into the custody of the Commonwealth are not anticipated to implicate early distribution related taxes. Upon the transfer of an IRA or certain retirement assets pursuant to Section 1301.8, the Commonwealth will act solely as custodian of those assets until such time as the owner or beneficiary is located and reclaims the abandoned and unclaimed property. Because neither the owner nor the beneficiary will have constructive possession or control of the account, the transfer to the Commonwealth’s custody should not be taxable, reportable or potentially penalize a premature distribution to the account owner, but instead should be treated as a non- reportable transfer of retirement assets....”

It is this position that appears uncertain and for which Pennsylvania is delaying enforcement with respect to retirement account until it gets confirmation from the IRS.

The policy guidance from PA (which appears to have been issued in 2016) can be read here: http://patreasury.gov/pdf/unclaimed-pro ... e-2016.pdf

There is also information in the Policy Guidance regarding actions which, if taken, avoid a determination that the account has been abandoned.

Further, according to the PA Unclaimed Property website FAQ for businesses in PA holding unclaimed property: “Property for residents of other states should be reported to the state of the owner’s last known address.” Based on this, Vanguard should only be reporting unclaimed property based on PA law for those for which the last known address is in PA.

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Re: How Unclaimed Property Laws Can Affect Retirees

Post by ResearchMed » Wed Jul 18, 2018 4:34 pm

SuzBanyan wrote:
Wed Jul 18, 2018 4:09 pm
MikeG62 wrote:
Wed Jul 18, 2018 1:56 pm
ResearchMed wrote:
Wed Jul 18, 2018 1:26 pm
If they are IRA's with zero activity, what about the taxes?

Do they just withhold (at max tax rate?) and send the rest to the state?
And what about penalties for those "underage"?

And what about money in 403b/etc., plans - money that cannot be removed per rules?

RM
This was stated in the article WRT your question:

"...if the state takes your unclaimed IRA or 401(k), it essentially liquidates the account and takes the money out of the tax-deferred shelter. In this event, the unclaimed property now becomes subject to income taxes. Even if the individual finds an unclaimed retirement account property later on, there will likely be substantial back taxes to be paid, and the tax-deferred nature of the retirement account will have been lost."
Contrary to the statement in the article quoted above in the article, apparently Pennsylvania takes the position that an unclaimed retirement account is a “trustee-to-trustee” transfer:

“The provisions of Section 1301.8 directing the transfer of abandoned and unclaimed retirement accounts into the custody of the Commonwealth are not anticipated to implicate early distribution related taxes. Upon the transfer of an IRA or certain retirement assets pursuant to Section 1301.8, the Commonwealth will act solely as custodian of those assets until such time as the owner or beneficiary is located and reclaims the abandoned and unclaimed property. Because neither the owner nor the beneficiary will have constructive possession or control of the account, the transfer to the Commonwealth’s custody should not be taxable, reportable or potentially penalize a premature distribution to the account owner, but instead should be treated as a non- reportable transfer of retirement assets....”

It is this position that appears uncertain and for which Pennsylvania is delaying enforcement with respect to retirement account until it gets confirmation from the IRS.

The policy guidance from PA (which appears to have been issued in 2016) can be read here: http://patreasury.gov/pdf/unclaimed-pro ... e-2016.pdf

There is also information in the Policy Guidance regarding actions which, if taken, avoid a determination that the account has been abandoned.

Further, according to the PA Unclaimed Property website FAQ for businesses in PA holding unclaimed property: “Property for residents of other states should be reported to the state of the owner’s last known address.” Based on this, Vanguard should only be reporting unclaimed property based on PA law for those for which the last known address is in PA.
It looks like it's not easy to get an account declared abandoned.
IF they take the final step of sending first class mail (other contact methods having already failed) then if it is NOT returned as "undeliverable", the account is NOT abandoned. (?)

But I don't see anything about if someone is still working and is not allowed to remove money yet.

In our case, jumping through all the hoops, including no activity at all for some years, would probably take as long as until DH does retire (or maybe not at the rate he is going!).
Otherwise, all we'd apparently have to do is stop responding to any overtures, watch for that envelope eventually, and then mark it "undeliverable", etc.
Then wait (how long!?) and retrieve the money from our state (or from PA)....??

We could leave a certain amount at Vanguard, and move the rest to Fidelity (or TIAA) and just ignore the Vanguard amount. :twisted:
We apparently would not be subject to the "hold" on this, as DH is already well over th 70.5 cut-off, before which they are *not* enforcing this.

I'll be there are lots of other little glitches they haven't yet thought of, if they had to add the 70.5 age factor after the fact!

RM
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AlwaysWannaLearn
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Re: How Unclaimed Property Laws Can Affect Retirees

Post by AlwaysWannaLearn » Wed Jul 18, 2018 4:43 pm

.....

2015
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Re: How Unclaimed Property Laws Can Affect Retirees

Post by 2015 » Thu Jul 19, 2018 12:32 pm

Jack FFR1846 wrote:
Wed Jul 18, 2018 12:06 pm
What I'm concerned about is that the Commonwealth of Pennsylvania defines "active" and "inactive". When it comes to government, I would never assume that logic or fairness is going to be considered. I'm happy to say that Vanguard sent me an automatic email telling me they got my message and will get around to answering it someday. Cool.
Please post when you get an answer from VG! As to the Commonwealth of Pennsylvania, Ceaser will always find new and inventive ways to engage in taxation and rent-seeking.

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Re: How Unclaimed Property Laws Can Affect Retirees

Post by littlebird » Thu Jul 19, 2018 1:56 pm

Just got 2 notices from custodian of long-retired spouse’s traditional and Roth IRAs (BMO Harris, my neighborhood b&m bank) that “ due to lapse of contact” with him, they are required to turn over his accounts to the state of AZ. The IRAs are 3 years into 5 year terms, with the RMDs from the traditional being calculated yearly and paid into an active checking account monthly. He gets his statements regularly and, according to the bank, no mail has ever been returned. During the 3 years, I have had to contact the branch and headquarters twice, with my POAs, regarding their lapses in recalculating the RMDs.

In addition to filling out the appropriate forms, I registered my displeasure with their aggressive interpretation of the law with the bank and the officer forwarded it to headquarters .

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Re: How Unclaimed Property Laws Can Affect Retirees

Post by MikeG62 » Thu Jul 19, 2018 3:58 pm

ResearchMed wrote:
Wed Jul 18, 2018 4:34 pm

It looks like it's not easy to get an account declared abandoned.
IF they take the final step of sending first class mail (other contact methods having already failed) then if it is NOT returned as "undeliverable", the account is NOT abandoned. (?)
Logic would say you are correct, but the experiences from Abe and littlebird above suggest otherwise.

It's mind-blowing that accounts are being escheated despite people being in contact with their financial institutions. It's would seem to truly be the wild west out there when it comes to unclaimed property. :x
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RetiredAL
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Re: How Unclaimed Property Laws Can Affect Retirees

Post by RetiredAL » Thu Jul 19, 2018 5:23 pm

This state's action should be concerning to all. Many investment account are stagnate for one reason or another. Stagnate does no equate to abandoned.

Just a few months ago, my Dad got a warning msg related to his saving account saying the account had be suspended when he logged into Wells Fargo to check his balances/transactions. I called WFB, I'm listed as co-owner, and was told because there was no activity for 18 months, it was flagged as abandoned, that monthly interest was not considered activity, nor did logging on qualify, and that physical $ in or out of the account must happen remain active.

As I see it, the DUFASes that run the place didn't think to aggregate all the accounts when checking to see if he was active or not. They only checked accounts singly. His checking account transactions are around $7500 a month, his WFB Credit card is typically a couple thousand a month, and he has multiple investment accounts with them totaling north of $500K. And they wonder why there is an exodus of customers.

I thanked the agent for the info and asked that if possible, that she communicate upwards my disdain towards this poor business process.

I resolved the saving account requirement for in or out $ by scheduling $1 to be moved on a recurring basis. However, one of his IRA's has had no in or out for years, as the other IRA is his RMD draw-down account. Could they consider it inactive, I don't know. Hopefully the process on their investment side is not stupid as on the banking side.

Lastly, I would assume that escheatment to a State of a pre-tax account would create a taxable event, thus it could be an ugly event.

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Re: How Unclaimed Property Laws Can Affect Retirees

Post by PVW » Fri Jul 20, 2018 6:42 am

RetiredAL wrote:
Thu Jul 19, 2018 5:23 pm
Just a few months ago, my Dad got a warning msg related to his saving account saying the account had be suspended when he logged into Wells Fargo to check his balances/transactions. I called WFB, I'm listed as co-owner, and was told because there was no activity for 18 months, it was flagged as abandoned
[...]
I resolved the saving account requirement for in or out $ by scheduling $1 to be moved on a recurring basis.
Wells Fargo documents their process for Inactive Accounts. Your account should have activity once per year. Activity on one of your accounts should count as activity on all your accounts. Automatic transactions don't satisfy their account activity definition.

https://www.wellsfargofunds.com/ind/acc ... ivity.html

marcopolo
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Re: How Unclaimed Property Laws Can Affect Retirees

Post by marcopolo » Fri Jul 20, 2018 8:37 am

PVW wrote:
Fri Jul 20, 2018 6:42 am
RetiredAL wrote:
Thu Jul 19, 2018 5:23 pm
Just a few months ago, my Dad got a warning msg related to his saving account saying the account had be suspended when he logged into Wells Fargo to check his balances/transactions. I called WFB, I'm listed as co-owner, and was told because there was no activity for 18 months, it was flagged as abandoned
[...]
I resolved the saving account requirement for in or out $ by scheduling $1 to be moved on a recurring basis.
Wells Fargo documents their process for Inactive Accounts. Your account should have activity once per year. Activity on one of your accounts should count as activity on all your accounts. Automatic transactions don't satisfy their account activity definition.

https://www.wellsfargofunds.com/ind/acc ... ivity.html
If the description of events above is accurate, WFB seems to be violating at least two points in their own policy. They state that logging on to your account counts as activity, and they state that the activity is aggregated across accounts. The poster above indicated they met both of those criteria. So, I am not sure how reading the terms would have helped them much.
Once in a while you get shown the light, in the strangest of places if you look at it right.

MikeG62
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Location: New Jersey

Re: How Unclaimed Property Laws Can Affect Retirees

Post by MikeG62 » Fri Jul 20, 2018 2:24 pm

marcopolo wrote:
Fri Jul 20, 2018 8:37 am
PVW wrote:
Fri Jul 20, 2018 6:42 am
RetiredAL wrote:
Thu Jul 19, 2018 5:23 pm
Just a few months ago, my Dad got a warning msg related to his saving account saying the account had be suspended when he logged into Wells Fargo to check his balances/transactions. I called WFB, I'm listed as co-owner, and was told because there was no activity for 18 months, it was flagged as abandoned
[...]
I resolved the saving account requirement for in or out $ by scheduling $1 to be moved on a recurring basis.
Wells Fargo documents their process for Inactive Accounts. Your account should have activity once per year. Activity on one of your accounts should count as activity on all your accounts. Automatic transactions don't satisfy their account activity definition.

https://www.wellsfargofunds.com/ind/acc ... ivity.html
If the description of events above is accurate, WFB seems to be violating at least two points in their own policy. They state that logging on to your account counts as activity, and they state that the activity is aggregated across accounts. The poster above indicated they met both of those criteria. So, I am not sure how reading the terms would have helped them much.
Agree Marcopolo. It's concerning. I suspect if you did things which fell under their policy you'd get your money back - eventually. However, it would sure be painful to have to go through that process in the first place.

We must remain extra vigilant and now make sure, in addition to logging in and printing statements, we have some account activity just to put a belt and suspenders around it. Ridiculous that we have to do this! :evil:
Real Knowledge Comes Only From Experience

RetiredAL
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Location: SF Bay Area

Re: How Unclaimed Property Laws Can Affect Retirees

Post by RetiredAL » Fri Jul 20, 2018 6:51 pm

MikeG62 wrote:
Fri Jul 20, 2018 2:24 pm
marcopolo wrote:
Fri Jul 20, 2018 8:37 am
PVW wrote:
Fri Jul 20, 2018 6:42 am
RetiredAL wrote:
Thu Jul 19, 2018 5:23 pm
Just a few months ago, my Dad got a warning msg related to his saving account saying the account had be suspended when he logged into Wells Fargo to check his balances/transactions. I called WFB, I'm listed as co-owner, and was told because there was no activity for 18 months, it was flagged as abandoned
[...]
I resolved the saving account requirement for in or out $ by scheduling $1 to be moved on a recurring basis.
Wells Fargo documents their process for Inactive Accounts. Your account should have activity once per year. Activity on one of your accounts should count as activity on all your accounts. Automatic transactions don't satisfy their account activity definition.

https://www.wellsfargofunds.com/ind/acc ... ivity.html
If the description of events above is accurate, WFB seems to be violating at least two points in their own policy. They state that logging on to your account counts as activity, and they state that the activity is aggregated across accounts. The poster above indicated they met both of those criteria. So, I am not sure how reading the terms would have helped them much.
Agree Marcopolo. It's concerning. I suspect if you did things which fell under their policy you'd get your money back - eventually. However, it would sure be painful to have to go through that process in the first place.

We must remain extra vigilant and now make sure, in addition to logging in and printing statements, we have some account activity just to put a belt and suspenders around it. Ridiculous that we have to do this! :evil:

1st, the account they blocked access to as potentially inactive was a regular WFB Saving Account, not a Wells Investment Account.

2nd, I appreciate the link for the Wells Fargo Funds page, as they does clarify that they do aggregate and that a single logon is adequate for all accounts.

His investments accounts are with Wells Fargo Advisors, so slightly different rules may apply. Besides all the program trades in his taxable account, his RMD goes to taxable each month. It used to be that logging into WFB and WFA were different, but they unified the user experience a while back, and going back and forth is now near transparent. Both he and I usually access the investment displays via the main WFB Accounts Page, so I hope that is considered a valid WFA logon.

And for those that grimace over the name Wells Fargo Advisors, he desires to keep it that way in spite of my counseling, and other than the fee, the service/function/program/ect has been fine.

Carolina Shagger
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Joined: Mon Aug 10, 2009 5:21 am

Re: How Unclaimed Property Laws Can Affect Retirees

Post by Carolina Shagger » Fri Jul 20, 2018 7:58 pm

I had WF flag one of my checking accounts as possibly inactive. My son makes ACH transfers into this account twice a month (he is repaying a loan). I went into the bank and was told this was not "activity" as on-line transactions do not count as activity. You have to physically go into a bank and make a transaction. I questioned this as I could see envision lots of folks who do everything on line or physically cannot get to a bank. I was also told that anyone but the account owner making a deposit would also not count as an activity. They want to see the account owner!
Of course WF now has a policy that you have to show your ID to make any cash deposit regardless of amount. I questioned as to whether there is a de-minimus amount and the answer was no. Even the IRS doesn't require a 1099 for less than $10.
Bureaucracy gone mad.

Broken Man 1999
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Re: How Unclaimed Property Laws Can Affect Retirees

Post by Broken Man 1999 » Sat Jul 21, 2018 5:33 pm

Wow! Unbelievable actions. Seems retirement accounts should be excluded, as I can totally see someone rolling 401k money into an IRA, and not being able to add funds, and not be of the age where withdrawals are required, perhaps wouldn't generate much interest of the owner whist they continue working.

Every time I read of these issues I really am glad we have consolidated retirement accounts at Vanguard, where moving to the brokerage platform allowed reduction of total Vanguard accounts. As well, we recently did away with our joint accounts at the credit union. Heh, there were never any "joint" activities, as I was the only one who put funds in the account. No great loss to me to close, at all.

Simplify, simplify, simplify! So much easier to conduct our investing at Vanguard, and our banking at our credit union.

On the savings accounts at Wells Fargo mentioned above, the bank's activities seem really suspect. But, honestly, strictly based on WF's issues as related by the press, I would probably believe anything negative I read about the company. No direct knowledge at all, though.

Hopefully the sending of warning letters will keep most folks safe from this issue.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven than I shall not go. " -Mark Twain

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Kenkat
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Location: Cincinnati, OH

Re: How Unclaimed Property Laws Can Affect Retirees

Post by Kenkat » Sat Jul 21, 2018 5:59 pm

Ping Pong wrote:
Wed Jul 18, 2018 1:22 pm
How should we keep pensions active? I have a pension that wont have any activity for another couple of decades. I’m not even allowed to create any activity in it before then.
If it is a traditional defined benefit pension plan, you don’t own that - your employer does.

littlebird
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Joined: Sat Apr 10, 2010 6:05 pm
Location: Valley of the Sun, AZ

Re: How Unclaimed Property Laws Can Affect Retirees

Post by littlebird » Sun Jul 22, 2018 1:45 pm

Broken Man 1999 wrote:
Sat Jul 21, 2018 5:33 pm

Wow! Unbelievable actions. . . .

Hopefully the sending of warning letters will keep most folks safe from this issue.

Broken Man 1999
Until the day when confusion sets in and the person(s) holding your P.O.A. knows nothing about it, has died, is continents away and has misplaced the document. And you no longer have the capacity to name a new attorney-in-fact. We thought setting up hands- off systems were the answer to planning for our old age, but we’ve been defeated again. I did write to my Congresspeople and the Chairpersons of all the finance-related committees a few years ago when these problems started to become evident. I recommend others do the same and, preferably, more.

Broken Man 1999
Posts: 1530
Joined: Wed Apr 08, 2015 11:31 am

Re: How Unclaimed Property Laws Can Affect Retirees

Post by Broken Man 1999 » Sun Jul 22, 2018 4:34 pm

littlebird wrote:
Sun Jul 22, 2018 1:45 pm
Broken Man 1999 wrote:
Sat Jul 21, 2018 5:33 pm

Wow! Unbelievable actions. . . .

Hopefully the sending of warning letters will keep most folks safe from this issue.

Broken Man 1999
Until the day when confusion sets in and the person(s) holding your P.O.A. knows nothing about it, has died, is continents away and has misplaced the document. And you no longer have the capacity to name a new attorney-in-fact. We thought setting up hands- off systems were the answer to planning for our old age, but we’ve been defeated again. I did write to my Congresspeople and the Chairpersons of all the finance-related committees a few years ago when these problems started to become evident. I recommend others do the same and, preferably, more.
I constantly share our financial info with my daughters. I know from experience in dealing with my father's estate how helpful it was to be involved as he aged. When I decided to become the trustee of his trust, he seemed very appreciative, perhaps even relieved. My siblings knew the details of everything, as well. But, such activities do require a certain amount of trust from all parties. Sadly, not all family dynamics make this possible. Thankfully our family dynamics do. Might change in the future, but you can only do what you can at any given point in time.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven than I shall not go. " -Mark Twain

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