It may come as a surprise to many bank account holders in the US but long gaps in transaction can land an account holder in trouble.

Under most state laws, if an account holder does not initiate a transaction for a particular length of time, the account is considered dormant. If it continues to lie in the dormant state for more than three years, the assets of the account can be taken over by the state.

According to the National Association of Unclaimed Property Administration, in the fiscal year 2006 alone $4.7 billion in abandoned assets were turned over to the states. This increased the total of such assets in state hands to $33 billion. The Association also revealed that this amount has been seized from around 117 million bank customers in the country which works out to an average of $282 per individual.

Laws governing inactive accounts were enacted to protect customers so that banks do not consume the abandoned assets in the form of annual account fees. In theory the state is simply holding the dormant account in safekeeping until the rightful owners can claim them. However, process for retrieving the money is torturous and in many cases the state uses the money to fill its own budget needs.

So the best way of avoiding the seizure of one’s bank assets is to make regular transactions, whether of deposit or withdrawal and no matter how small. Moreover if one has a safe deposit box, one should visit it at least once a year.