Americans saving for retirement often follow the “buy and hold” strategy, urging them to block out the daily volatility of markets, stick to long-term investment plans, and avoid playing stockbroker. The stock market’s growth over the last 15-20 years proves why that approach makes sense despite financial crises, geopolitical conflict, and fiscal showdowns.
However, laws on the books in most states, if not properly reformed, could jeopardize the retirement nest eggs of those who saved and invested in a responsible manner.
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What very few Americans know is that their state government may have the legal right to undermine the “buy and hold” approach to saving. If you do not engage with your brokerage account in specific ways, the state deems your assets lost and assumes ownership on your behalf. This shocking maneuver is called escheatment.
Take Walter Schramm, who opened an E-Trade account in the 1990s and invested about $6,000 worth of Amazon stock. He waited 20 years to check in on his savvy investment, which should have grown to around $100,000. When he logged into his account, the balance was zero.
Delaware had escheated the AMZN assets and liquidated them in 2008 for $8,000, deciding that, by not interacting with his account, Schramm must have lost record of it. In “abandoning” his account, Walter forfeited his right to any appreciated value after the state took ownership of his investment. Today, he continues to seek legal remedies to recoup the loss of $92,000 in market growth.
Stories like this moved Congress to introduce a bipartisan bill called the SAFER Act. The proposal from Rep. Sam Liccardo (D-CA) and Mike Lawler (R-NY) creates a uniform national standard that protects ownership of securities until death. The sooner Congress passes the SAFER Act, the better. Absent federal action, states are moving in the wrong direction.
For example, a provision tucked into Ohio’s 2026 budget allows the Buckeye State to assume ownership permanently of unclaimed property to be used for the construction of the Cleveland Browns’ new stadium. A recently issued injunction has put that on hold until the conclusion of a pending legal challenge.
Historically, states’ unclaimed property laws serve an important purpose: reuniting customers with forgotten or abandoned assets. But in recent years, states have quietly redefined their core standard for escheatment, shifting to a broad standard triggered by something as minimal as failing to log in to an online account for three years or making only automatic deposits into an account. This standard characterizes normal, long-term customer habits as abandonment of property rights.
Aggressive escheatment results in the seizure of stocks, mutual funds, and other investments that are not truly abandoned. State policymakers are facing many financial challenges, but the escheatment of long-term investors’ assets is a step too far.
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Demonstrating how this issue cuts across all regions and political landscapes, efforts to advance similar inactivity standards are now underway in states across the country, including Oregon, Illinois, Connecticut, Nevada, and Florida. This year, policymakers in Mississippi wisely defeated a proposal that would have shifted to an inactivity/dormancy standard. Meanwhile, in Florida, lawmakers are already revising a just-implemented 2024 inactivity law after determining it was too aggressive.
State law should recognize the unique characteristics of property, such as securities, which offer long-term investment opportunities. State lawmakers who reach for Americans’ savings risk not only legal challenges but public backlash. The patchwork of state escheatment laws and the onslaught of aggressive new proposals underscore the need not only for state escheatment law reform but also the nationwide standard provided by the SAFER Act.
Patrick Gleason is vice president of state affairs at Americans for Tax Reform, an organization founded in 1985 at the request of President Ronald Reagan.
