Escheatment and unclaimed property

Escheatment is the transfer of unclaimed property (abandoned property), accounts or unpaid checks to the state in which the investor or payee last resided. Regulations in all 50 states, the District of Columbia and U.S. territories require Capital Group to forward these assets after they have been unpaid or have remained dormant for a specified period of time. The time frames for escheatment vary from 1 to 7 years, depending on the property type and the investor’s or payee’s last state of residence.

What Capital Group does to prevent and resolve unclaimed property issues

Capital Group conducts required searches and mailings to comply with federal and state laws. Additionally, attempts may be made to re-establish contact with investors and/or their financial professional by mailing letters (and in some cases, also sending emails) to those who:

• Haven’t initiated contact with Capital Group for several years
  • Based on escheatment laws, states may consider the account dormant. If an investor hasn’t initiated contact for 2 to 5 years, some states consider the account to be abandoned.
• Have had undeliverable mail for a specified time
• Have had uncashed checks for a specified time

How you can help prevent unclaimed property issues

The most important step in preventing unclaimed property issues is by staying in contact with Capital Group. Some ways you can do this are:

• Keep your contact information, including your mailing address, up-to-date
• Log in to your account online at least once every 2 years
• Cash any dividend or withdrawal checks received from your account
• Open and review mail you receive from Capital Group. If you receive a letter about unclaimed property, contact us immediately.

Tax implications

Traditional IRAs escheated to a state after you reach the required minimum distribution age are considered taxable distributions and are:

• Subject to 10% mandatory federal tax withholding and any mandatory state tax withholding
• Reported on Form 1099-R for the year of the distribution