https://twitter.com/TCII_Blog/status/1781354170865344919
A wild risk factor for good investors is the concept of “escheation of an investment account”. Basically, if you have an investment account that you neglect to access for as little as three years in some states - the custodian and the state government can deem it abandoned and then sell the assets. Then, the state holds it in cash in your name.
Notable examples included many people who had Berkshire Hathaway $BRK.B stock certificates that, instead of compounding, were turned over to state governments unbeknownst to them and sold so they didn’t experience the compounding. Walter Schramm bought Amazon $AMZN stock and didn’t want to get affected by price quotes so he didn’t log in to his brokerage account … well, the broker turned it over to the State of Delaware where it was sold and he missed out on most of Amazon’s absurdly incredible performance.
At a minimum, property should not be declared “lost” on a three-year time frame when it is a passive ownership position. The “purpose section” of most state’s escheat laws state that owners have a responsibility to exercise their ownership, but that doesn’t apply when you are a passive, limited stockholder - wealth is created by allowing it to compound.
State laws should be changed to lengthen the period before escheating your stock holdings to the state, and there should be a robust “notice” period and I think we as Americans should require a court petition for amounts over a certain threshold before escheat happens.
I want your private property rights to be stronger. This is America.