It’s not uncommon that in the first year of my relationship with a client, we come across assets that they didn’t know they owned. Embarking upon these treasure hunts is one of the guilty pleasures of my job. And quite often the discovery comes simply from reviewing their 1040 tax form (namely Schedule B).
The conversation goes something like this:
“Tell me the story behind owning Brighthouse Financial stock.”
“I don’t own any stock.”
“Apparently you do, and they are paying you annual dividends.”
And so the treasure hunt begins…
Some of the most common assets my clients and I uncover are shares of stock in life insurance companies – and for good reason. In the late 80s and early 90s there was a large group of insurance companies who “demutualized,” meaning they moved from being a mutual company (owned by its policyholders) to a public company (owned by its shareholders). This process included offering shares of stock or cash to current life insurance policyholders. If the policyholder didn’t make a choice or ignored the letter, they were given stock.
To add to the confusion, another stock ownership was often spawned from this event. Take Metlife for example. In 2000 Metlife issued 500 million shares of stock to its policyholders. In 2017 Metlife spun-off a part of its company to become Brighthouse Financial. This meant that a shareholder of Metlife then received stock in Brighthouse. If you didn’t know you owned stock in Metlife (due to demutualization), you sure as heck don’t know that you now own stock in Brighthouse Financial.
The benefits of finding hidden assets sooner rather than later…
Aside from the obvious joy of found money, there are significant benefits to uncovering these hidden treasures and doing something about them. The importance I place on taking action comes from the very different experiences of two of my clients. For my first client (I’ll call her Jane), we uncovered her ownership of Metlife stock, called the automated system at Computershare, sold the stock and had them send her a check. The process took all of 10 minutes.
My other client (let’s call her Sarah) uncovered the Metlife stock as she tried to settle her mother’s estate. Sarah’s mother had been quite organized regarding her estate. She had created a trust and titled her significant assets to this trust. But Sarah’s mom didn’t know she owned Metlife stock. It was many forms, medallion signature requirements, a filed small estate affidavit and a year later when Sarah was finally able to take control of that Metlife stock.
The treasure hunt doesn’t have to end with stock ownership. For clients who have moved a lot in their lives, participated in rebate programs, etc., there can be cash and checks that have long since gone to their state of residence as unclaimed property. In the case of my client, Jane, we found another $500 in unclaimed rebates and small balances from old accounts by simply typing her last name into the official California unclaimed property site.
Clues to help you navigate a modern-day treasure hunt of your own…
- Don’t just assume a 1099-DIV from an insurance company is because you own a life insurance policy. Some of the companies who demutualized in the early 90’s include:
- John Hancock
- Computershare is one of the largest stock transfer companies. If you get letters or statements from them, you most likely own stock.
- If you get quarterly statements from Computershare that lists your life insurance company stock price, you own stock in that company.
- It’s highly unlikely you would have told Computershare about your change in address if you didn’t even know Computershare lists stock in your name, so if you want to investigate further, you can establish a sign-in or call Computershare to see if there are any accounts linked to your social security number. The caveat here, you must use your social security number to investigate.
- Most states have an official government website to research unclaimed property. For California you simply have to type in your last name: Unclaimed Property Search. If you’ve lived in multiple states, go to each state’s official site to search.
Most importantly if you come across any of these unclaimed gems, take action. Speak with your advisor about the best way to handle your situation. You could move the stock out of Computershare to your own brokerage account, or better yet, sell and diversify. Start a claims process for any cash the States might be holding for you. Clean up these wayward assets so your heirs won’t have to. And with that extra cash in your pocket, you can reward yourself and your favorite charity.