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States starting to escheat unannuitized VAs?
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Rich Carreiro
May 22, 2013, 3:54:22 PM5/22/13
to
I had an interesting conversation with Vanguard today and
wanted to pass it along...
My mother has a variable annuity with Vanguard. It is not
annuitized and there is no desire for it to be annuitized.
The other day she got a letter from Vanguard stating that
unless she took action Vanguard would be annuitizing the VA.
I called up Vanguard and talked to one of their annuity
people about this.
The Vanguard rep said that historically Vanguard has not
enforced the VA's "commencement date" -- the date chosen
back at purchase for when the VA would annuitize. But
states have started enacting and proposing laws saying that
if a VA is not annuitized on the commencement date, then
five years later, some amount of VA escheats to the state
(I'm guessing the amount is equal to all the payments that
would have been made if the VA had been annuitized).
Therefore, Vanguard is contacting people (don't know if they
are contacting all VA holders or just those in states with
enacted/proposed VA escheat laws) who are at/after the
commencement date and telling them that if they do nothing
the VA will be annuitized and that if they don't want that,
then contact Vanguard to either defer the commencement date
or cash out the VA). In my mother's case she just deferred
the commencement date to age 99 (I don't know if that's the
latest allowed by Vanguard or her state's law).
--
Rich Carreiro rlc-...@rlcarr.com
wanted to pass it along...
My mother has a variable annuity with Vanguard. It is not
annuitized and there is no desire for it to be annuitized.
The other day she got a letter from Vanguard stating that
unless she took action Vanguard would be annuitizing the VA.
I called up Vanguard and talked to one of their annuity
people about this.
The Vanguard rep said that historically Vanguard has not
enforced the VA's "commencement date" -- the date chosen
back at purchase for when the VA would annuitize. But
states have started enacting and proposing laws saying that
if a VA is not annuitized on the commencement date, then
five years later, some amount of VA escheats to the state
(I'm guessing the amount is equal to all the payments that
would have been made if the VA had been annuitized).
Therefore, Vanguard is contacting people (don't know if they
are contacting all VA holders or just those in states with
enacted/proposed VA escheat laws) who are at/after the
commencement date and telling them that if they do nothing
the VA will be annuitized and that if they don't want that,
then contact Vanguard to either defer the commencement date
or cash out the VA). In my mother's case she just deferred
the commencement date to age 99 (I don't know if that's the
latest allowed by Vanguard or her state's law).
--
Rich Carreiro rlc-...@rlcarr.com
Pico Rico
May 22, 2013, 11:22:04 PM5/22/13
to
"Rich Carreiro" <rlc-...@rlcarr.com> wrote in message
news:87k3mq9...@swing-shift.time-tripper.com...
I wonder if, as is all too common, this rep got it a bit wrong. Unclaimed
property, after a certain period of time, is supposed to escheat to the
state. Before that time, the owner of the property, or heirs, etc. can and
should be located. If so, the property is not unclaimed.
In the present situation, the owner is readily known, so there should be no
escheat.
However, maybe the state are entitled to some lost income tax, that would
have been paid if the VA was annuitized.
Rich Carreiro
May 22, 2013, 11:57:02 PM5/22/13
to
"Pico Rico" <Pico...@nonospam.com> writes:
>Unclaimed property, after a certain period of time, is supposed to
>escheat to the state. Before that time, the owner of the property, or
>heirs, etc. can and should be located. If so, the property is not
>unclaimed.
>
>In the present situation, the owner is readily known, so there should
>be no escheat.
That's not quite how it works.
>Unclaimed property, after a certain period of time, is supposed to
>escheat to the state. Before that time, the owner of the property, or
>heirs, etc. can and should be located. If so, the property is not
>unclaimed.
>
>In the present situation, the owner is readily known, so there should
>be no escheat.
The onus is on you, the account owner, to "speak up" as it were, to
avoid escheatment, even if the financial institution knows exactly who
and where you are.
I have seen this with relatives and for myself with a bank account that
I keep for no good reason and never use.
The financial institution will send written notice as the time of
escheatment approaches saying to either make a transaction in the
account or send them written notice that you still exist. If you blow
that off the property *will* escheat even though you are known and
located.
Anyhow, I've been googling around and it appears many/most states have
escheatment laws which declare, by definition, that a variable annuity
is to be considered "abandoned" and subject to escheatment if it has
been N years past the commencement date and no activity has happened in
the account.
--
Rich Carreiro rlc-...@rlcarr.com
Pico Rico
May 23, 2013, 3:12:12 PM5/23/13
to
news:87ehcy4...@swing-shift.time-tripper.com...
are not known and located if you blow it off. All they know is that they
have a last known address for you in their files.
> "Pico Rico" <Pico...@nonospam.com> writes:
>
>>Unclaimed property, after a certain period of time, is supposed to
>>escheat to the state. Before that time, the owner of the property, or
>>heirs, etc. can and should be located. If so, the property is not
>>unclaimed.
>>
>>In the present situation, the owner is readily known, so there should
>>be no escheat.
>
> That's not quite how it works.
>
> The onus is on you, the account owner, to "speak up" as it were, to
> avoid escheatment, even if the financial institution knows exactly who
> and where you are.
>
> I have seen this with relatives and for myself with a bank account that
> I keep for no good reason and never use.
>
> The financial institution will send written notice as the time of
> escheatment approaches saying to either make a transaction in the
> account or send them written notice that you still exist. If you blow
> that off the property *will* escheat even though you are known and
> located.
if they send you a letter and blow it off, they don't know you exist. You
>
>>Unclaimed property, after a certain period of time, is supposed to
>>escheat to the state. Before that time, the owner of the property, or
>>heirs, etc. can and should be located. If so, the property is not
>>unclaimed.
>>
>>In the present situation, the owner is readily known, so there should
>>be no escheat.
>
> That's not quite how it works.
>
> The onus is on you, the account owner, to "speak up" as it were, to
> avoid escheatment, even if the financial institution knows exactly who
> and where you are.
>
> I have seen this with relatives and for myself with a bank account that
> I keep for no good reason and never use.
>
> The financial institution will send written notice as the time of
> escheatment approaches saying to either make a transaction in the
> account or send them written notice that you still exist. If you blow
> that off the property *will* escheat even though you are known and
> located.
are not known and located if you blow it off. All they know is that they
have a last known address for you in their files.
Pico Rico
May 23, 2013, 3:12:19 PM5/23/13
to
news:87ehcy4...@swing-shift.time-tripper.com...
The couple of state I have found include "activity" in the account to be
"corresponded in writing with the life insurance corporation concerning the
policy". So, this is just like "unclaimed" bank accounts - if they send you
a letter asking if you still exist, and you respond, there is no escheat.
"corresponded in writing with the life insurance corporation concerning the
policy". So, this is just like "unclaimed" bank accounts - if they send you
a letter asking if you still exist, and you respond, there is no escheat.
Retired
May 24, 2013, 1:49:23 AM5/24/13
to
On 5/22/13 11:57 PM, Rich Carreiro wrote:
<snip>
withdrawals over some period of time ??
<snip>
>
> The onus is on you, the account owner, to "speak up" as it were, to
> avoid escheatment, even if the financial institution knows exactly who
> and where you are.
>
> I have seen this with relatives and for myself with a bank account that
> I keep for no good reason and never use.
>
> The financial institution will send written notice as the time of
> escheatment approaches saying to either make a transaction in the
> account or send them written notice that you still exist. If you blow
> that off the property *will* escheat even though you are known and
> located.
>
> Anyhow, I've been googling around and it appears many/most states have
> escheatment laws which declare, by definition, that a variable annuity
> is to be considered "abandoned" and subject to escheatment if it has
> been N years past the commencement date and no activity has happened in
> the account.
>
Does this apply to traditional/rollover IRAs also ?? No additions or
> The onus is on you, the account owner, to "speak up" as it were, to
> avoid escheatment, even if the financial institution knows exactly who
> and where you are.
>
> I have seen this with relatives and for myself with a bank account that
> I keep for no good reason and never use.
>
> The financial institution will send written notice as the time of
> escheatment approaches saying to either make a transaction in the
> account or send them written notice that you still exist. If you blow
> that off the property *will* escheat even though you are known and
> located.
>
> Anyhow, I've been googling around and it appears many/most states have
> escheatment laws which declare, by definition, that a variable annuity
> is to be considered "abandoned" and subject to escheatment if it has
> been N years past the commencement date and no activity has happened in
> the account.
>
withdrawals over some period of time ??
Pico Rico
May 24, 2013, 1:35:48 PM5/24/13
to
"Retired" <Ret...@home.com> wrote in message
news:-N-dnYf-ZfSr8APM...@giganews.com...
don't have "activity" for a period of time. But that "activity" can just be
communication from you, such as a response to their letter saying "are you
still there?"
JoeTaxpayer
May 24, 2013, 1:43:17 PM5/24/13
to
On 5/24/13 1:35 PM, Pico Rico wrote:
> it only applies in the same manner it applies to bank accounts. If they
> don't have "activity" for a period of time. But that "activity" can just be
> communication from you, such as a response to their letter saying "are you
> still there?"
Does an online visit to the account count as activity?
> it only applies in the same manner it applies to bank accounts. If they
> don't have "activity" for a period of time. But that "activity" can just be
> communication from you, such as a response to their letter saying "are you
> still there?"
Pico Rico
May 24, 2013, 3:11:54 PM5/24/13
to
"JoeTaxpayer" <JoeTa...@comcast.net> wrote in message
news:kno533$hm$1...@dont-email.me...
the financial institutions. But they are supposed to send you a letter when
they think you are getting close to escheat status, so make sure you look at
your mail (don't confuse for junk mail) and reply to it.
zvkmpw
May 24, 2013, 9:05:16 PM5/24/13
to
> Does an online visit to the account count as activity?
When I was contacted by BofA about this issue a while ago, they said "no" unless the on-line session involved some account activity. Just viewing didn't count.
Since it was a CD -- no actual activity was possible -- I ended up sending them a "balance request" message once a year, even though the balance could be viewed on-line easily.
Whether this is California law, or BofA's policy, or just one their agent's whims, you be the judge.
AndyS
May 26, 2013, 10:14:48 PM5/26/13
to
On May 24, 11:50 am, JoeTaxpayer <JoeTaxpa...@comcast.net> wrote:
> Does an online visit to the account count as activity?
I wouldn't think that would count as "proof of life" since there is
> Does an online visit to the account count as activity?
no way to determine who originated the request. For instance,
my wife is not internet literate, so I handle all the internet
inquiries using the username and password which I set up for
her.
It would probably take a direct letter, with her name on it,
as a minimum to qualify for "proof of life"...
I am surprised that the SS people don't require notarized letters
every five years or so, since they send out SS checks directly
to the bank, without any definite knowledge that the recipient is
still alive. In our case, the checks go to a joint account where
either
of us can draw on it, and I would think that an unscrupulous person
would simply not report the death and continue getting checks
ad infinitum.......
Just a few thoughts....
bo peep
May 27, 2013, 4:27:30 AM5/27/13
to
On Sunday, May 26, 2013 7:20:03 PM UTC-6, AndyS wrote:
> I would think that an unscrupulous person
> would simply not report the death and continue getting checks
Funeral Directors are expected to report deaths to Social Security - see
> I would think that an unscrupulous person
> would simply not report the death and continue getting checks
http://www.ssa.gov/online/ssa-721.pdf
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