California is considering a bill that could affect how the state handles inactive stocks, mutual funds and other investment accounts. The proposal, Assembly Bill 1447, focuses on when an account can be treated as unclaimed property after the owner has stopped responding or shown no activity.
The key point for investors is simple: California can take custody of certain securities after years of inactivity, but AB 1447 is not a new program that immediately takes people’s investments. The legislation seeks to define the notice and contact standard used in the state’s unclaimed-property process.
Worth reading: The State By State Guide to Unclaimed Assets
What counts as abandoned property?
Unclaimed property is money or an asset that a bank, brokerage firm, employer, insurer or other company has been unable to return to its owner.
In California, investments may be considered abandoned after a period of no owner contact or activity. This can include an old brokerage account, shares held through a transfer agent, uncashed dividends, mutual-fund holdings or a retirement-related account that was left behind after a job change.
For securities, the concern is not necessarily whether the investment earned money or paid dividends. The important question is whether the owner has taken steps showing that they still know about and control the account.
Actions that may help show continued ownership include:
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Logging in to the account.
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Contacting the broker, fund company or transfer agent.
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Updating your address, email address or phone number.
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Responding to an account notice.
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Cashing a dividend check or otherwise communicating about the investment.
Failing to respond to notices or leaving an account untouched for several years may place it at risk of being reported to California as unclaimed property.
What AB 1447 would do
AB 1447 would clarify the circumstances under which investments may be transferred to the state. The bill would treat a failure to respond to a notice sent by mail or electronically as part of the standard for deciding whether an owner is still connected to an account.
Supporters of the bill, including State Controller Malia Cohen’s office, say it creates a clear and practical rule for investors, financial institutions and the state. Their position is that an owner should not be assumed to be actively connected to an account just because a mailed notice was not returned.
Investment-industry organizations and other business groups oppose the proposal. They argue that the state should require a mailed notice to be returned as undeliverable before it can take custody of securities. In their view, a lack of response alone should not be enough to treat stock or mutual-fund accounts as abandoned.
As of late August 2026, AB 1447 remained under consideration in the California Legislature.
What happens after a transfer?
When property is turned over, the California State Controller’s Office holds it through the state’s unclaimed-property system. California has roughly $15 billion in unclaimed property, including bank balances, checks, insurance payments and investment assets.
Securities may not remain as shares forever. California can hold the investments for a period and then sell them, keeping the cash proceeds in the state’s unclaimed-property system. If the rightful owner later makes a successful claim, the claim may be paid from those proceeds rather than by returning the original shares.
That matters because an owner could miss future price growth, stock splits or dividends that occur after the investments have been sold.
| Step | What can happen |
|---|---|
| Account becomes inactive | The financial company reviews whether the property may be unclaimed |
| Owner does not respond | The company may report the investment to California |
| California takes custody | The securities enter the state’s unclaimed-property system |
| Securities are liquidated | Shares may be sold and converted to cash |
| Owner claims property later | The owner may receive the recoverable cash amount after proving ownership |
How to protect your account
You do not have to buy or sell investments constantly to avoid an unclaimed-property issue. But you should make periodic contact and keep every account’s information up to date.
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Log in to brokerage, retirement and mutual-fund accounts regularly.
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Confirm that your email, mailing address and telephone number are current.
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Read notices from your broker, transfer agent and fund company.
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Respond promptly to requests to verify your identity or account information.
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Keep a list of former employers, retirement plans, banks and investment accounts.
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Search California’s official unclaimed-property database for your name, prior addresses and deceased relatives whose assets you may be eligible to claim.
Searching and filing a claim with California is free. Use the California State Controller’s Unclaimed Property Division rather than paying an outside service to locate assets.
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Start your free search today and claim what's rightfully yours!
