State Unclaimed-Property Laws Increasingly Allow Governments to Seize and Sell Stock with Minimal Justification
Source: "States can seize and sell your stocks under unclaimed property laws | Fox News." August 12, 2026. www.foxnews.com
The Gist
The article argues that many states have quietly changed their unclaimed-property laws to make it much easier to declare your stocks 'abandoned' and seize them—even if you're still receiving dividends and statements, just because you haven't logged in or contacted your broker recently. The author points out that states benefit financially from this practice (they can use the cash and keep profits when they sell your stock), citing a case where a man lost millions in stock appreciation after California sold his shares, only reimbursing him for the original sale price.
Conclusion
States have rewritten unclaimed-property laws in ways that make it too easy for governments to seize and sell citizens' stock investments, creating a system that financially benefits states at the expense of investors who never actually abandoned their property.
Premises
- States have shortened the dormancy period required before stock can be declared abandoned, from a historical norm of seven years to three years in more than half of states.
- States have shifted from a 'lost' standard (e.g., returned mail, unreachable owner) to a much broader 'inactivity' standard, meaning simply not contacting the company can trigger seizure even if the state knows exactly where the owner is.
- Investors following standard long-term investing advice (buy and hold, don't actively trade) are especially vulnerable to having their accounts flagged as dormant and seized.
- Once seized, states can sell the stock, and owners who later reclaim their property typically receive only the sale proceeds, not the shares or their subsequent appreciation, as illustrated by Jan Peters losing roughly $2.6 million in appreciation on seized Amazon stock.
- State budget agencies have explicitly calculated and projected the revenue gains from shortening dormancy periods (e.g., Texas's projected $72 million gain, New Jersey's projected jump from $90 million to $309 million), showing the financial incentive driving these law changes is real, not incidental.
- Once states take custody of unclaimed property, they can use the cash while awaiting owner claims, meaning the money helps finance government operations even though a liability to the true owner remains.
Assumptions
- The stated 'consumer protection' rationale for unclaimed-property laws is at least partially a pretext or secondary justification compared to the revenue motive.
- Receiving statements or automatic dividend deposits should reasonably count as evidence that an owner has not abandoned their property.
- The financial harm to investors (losing appreciation, having assets sold without consent) outweighs whatever lost-and-found benefit centralized state custody provides.
- Legislative revenue projections accurately reflect the primary motivation behind law changes, rather than being incidental byproducts of a genuinely protective policy.
- The current legal/regulatory system does not adequately protect investors from having actively-monitored, non-abandoned accounts wrongly seized.