The title sounds ridiculous but hear me out because actually it happened.

A German citizen who worked for Amazon had shares of stock. Lots of shares.

But because of an address mix up, the financial institution that held them was unable to reach him for several years via mail. Because of this, after a few years (3), the institution deemed the property as abandoned and turned it over to California’s unclaimed property division.

Three years of returned mail is all it took for the shares to go to the state.

California, completely within its rights, then sold the stock and held the cash until the citizen claimed it. I don’t know why selling it was necessary from the perspective of the owner (I know why from the state’s perspective, they can use the cash until he shows up!).

By the time he did, the stock was worth significantly more. The case worked its way to the Supreme Court but the court declined to hear it.

And if you’re wondering – this was all completely legal per state unclaimed property laws.

Quick Answer: Yes, it is possible.

Every state has laws allowing financial assets, including stocks, to be transferred to the state when they’re legally considered abandoned. In most states, the dormancy period is three or five years, but each state defines the triggering event differently.

Once securities reach the state, some states eventually sell them, potentially leaving you entitled to cash rather than the shares and any future appreciation… which can be significant.

The Government Isn’t “Taking” Your Stock

I learned this story through a Fox News opinion article sensationally titled “Governments can take your stocks without your permission. It happens all the time.”

It’s inaccurate because the government doesn’t really “take it.” It’s been deemed abandoned and so it has to go somewhere. They don’t seize it in some kind of asset forfeiture situation.

The end result is messy. The process begins when a financial institution can’t reach the owner within a specified period of time, which varies by state. If a bank has your money and can’t seem to find you, what are they supposed to do?

If someone sends you a check that you never cash, they still owe you the money but they can no longer find you. They can’t be forced to look for you forever, that’s just not reasonable. They also shouldn’t just hold it and wait for you to remember because youwon’t.

So, they send it to the state’s unclaimed property division and it’s now on you to recover it.

The legal process is called escheatment, when financial institutions transfer abandoned, dormant, and unclaimed property to the state government. The National Association of Unclaimed Property Administrators describes unclaimed property as accounts or property for which there has been no owner-generated activity or contact for a designated dormancy period.

The important part is this – it’s still your property and the claims process is usually straightforward. I’ve talked about it extensively when I recommend you periodically search for your missing money.

But stocks, unlike cash, create a special problem.

The state may not keep your shares indefinitely. It may sell them. And once they’re sold, recovering your money doesn’t necessarily put you back where you would have been had the shares never been taken in the first place.

The $1.6 Million Amazon Stock Story

That’s essentially what happened to Jan Peters.

Peters, a German citizen living in Germany and former Amazon employee, owned 1,029 shares of Amazon stock that was transferred to California’s unclaimed-property program. Then Amazon stock split 20-for-1, which meant had had 20,580 shares!

According to court filings, his German address somehow appeared as Munich, CA 00000 – which obviously does not exist.

California eventually sold the Amazon shares for approximately $1.6 million. Peters later recovered the proceeds, but by June 2025 he claimed those shares would have been worth more than $4.2 million had they remained invested. (and worth $5.35 million today!)

It went all the way to the Supreme Court, which declined to hear his case.

How Do You Avoid This?

I checked the current securities dormancy information published by the National Association of Unclaimed Property Administrators.

A majority of states now list a three-year dormancy period for securities. A smaller group of states generally use five years.

But there’s an enormous caveat:

The dormancy period isn’t necessarily the same thing as “years since you logged in.”

State statutes determine what starts that clock.

Here are the current securities dormancy periods.

Securities Unclaimed Property Rules by State

The periods below are based on NAUPA’s current 2026 securities reporting data. Individual statutes can impose additional conditions concerning returned mail, owner contact, electronic communication, death and other events, so this table should be viewed as a consumer guide rather than a substitute for the actual statute.

There are 35 states with a general three-year securities dormancy period, versus 14 states with five-year periods, with Illinois and Florida requiring more explanation than a single number provides.

Important: The actions above are practical ways to reduce the risk that your securities will be treated as abandoned, not guaranteed legal safe harbors. State laws differ on what constitutes an “indication of interest,” and simply logging into an account may not satisfy every state’s requirements. The safest approach is to keep your contact information current, respond to communications from the holder, and periodically initiate contact or activity that the institution records.

Review Specific State Laws for Abandonment

It’s important you review your state for its laws on what is considered inactivity, what triggers the presumption of abandonment. In some states, just logging in resets the clock. In others, it doesn’t matter.

Illinois: Where Logging In Matters

Illinois provides one of the clearest examples of why the word “activity” needs clarification.

Under Illinois law, a security can generally be presumed abandoned at the earlier of:

• three years after qualifying first-class mail is returned undeliverable, or
• five years after the owner’s last indication of interest.

But Illinois also defines what counts as an indication of interest – it includes communicating with the holder, accessing information about the account, directing activity in the account, making deposits or withdrawals, and certain other owner-directed actions.

Automatic reinvestment of dividends doesn’t necessarily count.

So here, logging into the account may genuinely make a difference as it is “accessing information about the account.”

New York: Returned Mail Is Important

New York’s statute governing broker-held securities says an account can become abandoned when, for three successive years, account statements or other communications sent by first-class mail have been returned because the owner couldn’t be located.

That’s materially different from treating an account as abandoned merely because you didn’t trade.

New York law also gives the comptroller authority to sell securities held as abandoned property.

South Carolina: Several Different Events Can Start the Clock

South Carolina’s statute is particularly explicit.

Stock or another equity interest can generally become unclaimed three years after the earliest of events including:

• an unclaimed dividend, stock split or distribution,
• account correspondence being returned as undeliverable, or
• the holder discontinuing communications with the owner.

Communication from the owner can stop the three-year clock.

Again, that’s not simply “you didn’t log in for three years.”

Review Specific State Laws for Liquidation

Abandonment is the first trigger, liquidation is the second and states vary on when that is permitted..

For example, Illinois generally prohibits its administrator from selling a security until three years after receiving it and providing the required notice, although the law allows an earlier sale if the administrator determines that doing so is in the owner’s best interest.

Maine uses a much shorter window. Its Revised Unclaimed Property Act generally permits securities to be sold after the state has held them for one year. If an owner claims after the applicable protection period and the securities have already been sold, the owner generally receives the net sale proceeds rather than subsequent appreciation.

New York gives its comptroller statutory authority to sell securities when the comptroller considers it practicable.

And this is precisely why liquidation deserves more attention than the initial dormancy period.

The permanent financial damage isn’t necessarily caused when your shares enter the unclaimed-property system. It can occur when those shares are converted to cash.

Why Do These Laws Exist?

An optimist would say these protect the consumer because financial institutions wouldn’t mind holding onto assets indefinitely, especially if no one knows they exist.

The current system establishes an unclaimed property database that a person or their heirs could search. You’d never be able to search ever financial institution yourself (nor would they be obligated to tell you).

The challenge is when property is claimed unexpectedly and, in the case of Peters, liquidated unnecessarily.

Why would states do this when they have to give you the property back anyway? Why take unclaimed property in the first place?

Because it’s a interest free loan between when they claim the property and when it is returned. And governments love interest free loans!

The issue has attracted enough attention that the U.S. Senate Banking Committee asked questions in April 2026 about trends in state escheatment laws and whether changing standards were increasing the likelihood that people’s property would be classified as unclaimed.

How to Keep Your Investment Accounts From Becoming Unclaimed Property

Fortunately, preventing this is pretty easy.

Instead, once or twice a year:

1. Log into every brokerage and investment account.
2. Make sure your mailing address is correct.
3. Verify your email address and telephone number.
4. Open and respond to requests from the brokerage or transfer agent.
5. Don’t ignore letters mentioning “unclaimed property,” “escheatment,” “dormancy” or “due diligence.”
6. Check old employer stock plans and transfer-agent accounts.

Many states rely on returned mail as a trigger for the escheatment clock.

Check for Unclaimed Property

While you’re at it – check Missing Money for unclaimed funds. You never know what you’ll find and it’s free.

The unclaimed property claims process is now fairly streamlined compared to several years ago. I remember filing a claim with Maryland about ten years ago and it required a notary. Nowadays, you can just fill out a form, scan your driver’s license, and wait.

Bottom Line

So, can the government really take your stocks because you haven’t logged into your account?

Yes, but that’s an oversimplification of what’s happening.

Each state has different triggers who what property is considered abandoned. And each state has different rules on when they are allowed to liquidate the property.

But if you review your state laws, keep your address up to date and remember to log in and check on the account, this risk is extremely low.