If you hold your own stock certificates – many people choose to let a broker-dealer keep them in street name or in the name of a nominee – then save yourself some agony down the road.

If you opt to keep stock in your name in your safe-deposit box, do yourself a favor: keep the company whose stock you bought apprised of your comings and goings. That’s not every time you leave the house, but when you move, certainly. The best way is to respond to their proxy requests. (It’s painless and also cheapest: they usually pay the postage!) These will automatically update shareholder files and show you as an interested shareholder.<

This really happened, and let it be a lesson to you. While living in California in 1983, a lady bought some stock, just a few shares. She held onto it for a while and then moved to Alaska some few years later. Maybe there were no proxy requests, probably her address forwarding request lapsed. Maybe she felt she owned too few shares to make any sort of difference. At any rate, there never was one instance in which her continued interest was conveyed to the company. When the company after 10 years tried to locate her – and count on it, they won’t try that hard – they couldn’t find her. The company sent notice to the clearinghouse that the shares were deemed unclaimed under Unclaimed Property rules (formerly known as "escheat") and issued new certificates for the state. (For Alaska’s rules on Unclaimed Property see AS 34.45).

The value of the shares is never lost; it always belongs to the owner or the owner’s heirs. But it could run you ragged trying to get it back, and it could cost you some money, depending on when the shares are sold. It cost the lady in our story.

She had bought the shares in 1983. They were declared unclaimed property in 1993 – after 10 years. California held the newly-issued shares for a year and then sold them. The price they got was about half of what they are now. Then in 2000 the lady decided to sell. She took the certificates to a broker and asked to sell them. The broker took them in and checked with the clearinghouse on their authenticity (to see if they were stolen, unclaimed property, etc.). The clearinghouse noted they had been deemed unclaimed property and told the brokerage. Since she had placed an order to sell, and there were no certificates to sell on settlement day, her broker had to buy the number of shares she wanted sold so he could deliver on the sell order.

After countless phone calls by an experienced attorney the story came together. California acknowledged they had the value of the shares (about half what they are now worth) and would return it on receipt of proper identification. Sounds easy? Folks, there are at least three bureaucracies involved – it is never easy.

This lady lost a little money, and a little sleep, but it could have been devastating on a large amount of shares. Eventually, the lady will get the value of her shares back (in 1994 dollars). It might have been different, but it’s always a chance. Don't chance it.