States across the U.S. have been quietly revising unclaimed-property laws, making it easier and faster for governments to declare securities as 'abandoned' and seize them from investors without their explicit permission [1]. According to Computershare, a major stock transfer agent, the period before stocks are considered abandoned has been reduced in most states from seven years to three years, and the criteria have shifted from a 'lost' standard (such as returned mail) to an 'inactivity' standard [1]. This means that even if investors are still receiving statements or dividends, their accounts may be flagged as dormant if they do not actively interact with their holdings, such as logging in or contacting their broker [1].
A notable case involves Jan Peters, a German citizen and former Amazon employee, who owned 1,029 Amazon shares before the company's 20-for-1 stock split [1]. Due to an address error, California classified his shares as unclaimed property, sold them for about $1.6 million, and transferred the proceeds to him, but not the shares themselves or their subsequent appreciation [1]. By June 2025, Peters calculated that the shares would have been worth over $4.2 million, highlighting the significant financial impact of these state actions [1].
Computershare has described this trend as 'unfortunate,' warning that the new standards create a 'bizarre trap' for long-term investors who follow the conventional wisdom of buying and holding quality stocks without frequent account activity [1]. The process typically involves the brokerage or transfer agent identifying dormant accounts, sending notices, and, if the investor does not respond appropriately, transferring the securities to the state, which may then sell them [1].
The article underscores the importance for investors to regularly interact with their accounts to avoid unintended forfeiture of their assets, as the financial system's knowledge of dividend payments or statement delivery may not be sufficient to prevent state seizure under current laws [1].
CONCLUSION
Recent changes to state unclaimed-property laws have made it easier for governments to seize and sell stocks deemed 'abandoned,' even when investors are still receiving dividends or statements. This shift poses significant risks to long-term investors and underscores the need for regular account activity to protect assets from unintended government action.