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LEGAL DICTIONARY

Escheatment

What Is Escheatment?

Escheatment is the legal term for the process of a financial institution turning over unclaimed property to the state government. The property can include bank accounts, funds, and other assets that have been unclaimed for a specified period after someone dies.

Escheatment usually happens when someone dies with no heirs and no last will and testament. In the United States, each state determines its own regulations for escheatment.

What Kinds of Property Can Be Escheated?

Escheated assets are often labeled as dormant, abandoned, or unclaimed. Brokerage firms, banks, and other financial institutions are responsible for reporting unclaimed property to the state after the amount of time set by its state.

Escheatment can include a variety of properties that are considered unclaimed or abandoned for an extended period. Here are examples of property that can be turned over to the state as part of the escheatment process.

  • savings or checking accounts
  • stocks
  • uncashed payroll checks
  • uncashed dividends or refunds
  • traveler's checks
  • unredeemed money orders
  • trust distributions
  • insurance payments
  • life insurance policies
  • annuities
  • utility security deposits
  • certificates of deposit
  • customer overpayments
  • safe deposit box contents

Some states also consider unclaimed gift cards and gift certificates as property that the state can claim under escheat rights.

Can an Heir Reclaim Escheated Property?

Each state has its own regulations governing escheat rights. In some cases, the property may reclaim escheated funds. However, these states may have a statute of limitations for taking this step.

What Is the Escheatment Process?

The majority of states have set procedures for the unclaimed property being turned over to the state after a certain time.

When an individual does without a will, their estate assets are considered intestate and must go through probate. This legal process involves researching potential heirs, including spouses, siblings, and other relatives. If the probate court cannot find heirs for the unclaimed assets, it will grant escheat rights to the state.

Escheatment can also happen if the court determines that the only rightful heirs are incompetent to manage the inheritance.

What Are Escheatment Laws by State?

Each state requires financial institutions and brokerage firms to show due diligence in locating the owner of an abandoned account. Beyond that, escheatment regulations and timeframes vary from state to state.

The following table lists escheatment laws by state for bank accounts, checks or drafts, and wages or salaries.

State Bank Account Checks/Drafts
Alabama 3 years* 1 year
Alaska 5 years 5 years
Arizona 3 years 3 years
Arkansas 3 years 3 years
California 3 years 3 years
Colorado 5 years 5 years*
Connecticut 3 years 3 years*
Delaware 5 years 5 years
District of Columbia 3 years* 3 years
Florida 5 years 5 years
Georgia 5 years 5 years
Hawaii 5 years 5 years
Idaho 5 years 5 years
Illinois 5 years 5 years
Indiana 3 years 3 years
Iowa 3 years 3 years
Kansas 5 years 2 years
Kentucky 3 years 3 years
Louisiana 5 years 5 years
Maine 3 years 3 years
Maryland 3 years 3 years
Massachusetts 3 years 3 years
Michigan 3 years 3 years
Minnesota 3 years 3 years
Mississippi 5 years 5 years
Missouri 5 years 5 years
Montana 5 years 5 years
Nebraska 5 years 5 years
Nevada 3 years 3 years
New Hampshire 5 years 5 years
New Jersey 3 years 3 years
New Mexico 5 years 5 years
New York 3 years 3 years
North Carolina 5 years 7 years/5 years*
North Dakota 5 years 2 years*
Ohio 5 years 5 years
Oklahoma 5 years 5 years
Oregon 3 years 3 years
Pennsylvania 3 years 3 years
Rhode Island 3 years* 3 years
South Carolina 5 years 5 years
South Dakota 3 years 3 years
Tennessee 5 years 5 years
Texas 5 years 3 years
Utah 3 years 3 years
Vermont 3 years 3 years
Virginia 5 years 5 years
Washington 3 years 3 years
West Virginia 5 years* 5 years
Wisconsin 5 years 5 years
Wyoming 5 years 5 years

*more in-depth state rules exist

A statute of limitations typically does not apply to dormant accounts. In other words, the rightful owner or beneficiary may be able to claim them from the state at any time.

The National Association of Unclaimed Property Administrators (NAUPA) is an organization that helps rightful owners claim unclaimed property. Individuals can conduct a free online search for unclaimed property through the NAUPA website.

Helpful Resurces:

Investopedia - Escheat Definition

Title Research - What is escheatment?

Patriot Software - What Is Escheatment?

NCSL - Abandoned or Unclaimed Property and Escheatment Statutes

Investopedia - How Can You Reclaim Unclaimed Property?

National Association of Unclaimed Property Administrators - Home

What Is Escheatment?

Escheatment is the legal term for the process of a financial institution turning over unclaimed property to the state government. The property can include bank accounts, funds, and other assets that have been unclaimed for a specified period after someone dies.

Escheatment usually happens when someone dies with no heirs and no last will and testament. In the United States, each state determines its own regulations for escheatment.

What Kinds of Property Can Be Escheated?

Escheated assets are often labeled as dormant, abandoned, or unclaimed. Brokerage firms, banks, and other financial institutions are responsible for reporting unclaimed property to the state after the amount of time set by its state.

Escheatment can include a variety of properties that are considered unclaimed or abandoned for an extended period. Here are examples of property that can be turned over to the state as part of the escheatment process.

  • savings or checking accounts
  • stocks
  • uncashed payroll checks
  • uncashed dividends or refunds
  • traveler's checks
  • unredeemed money orders
  • trust distributions
  • insurance payments
  • life insurance policies
  • annuities
  • utility security deposits
  • certificates of deposit
  • customer overpayments
  • safe deposit box contents

Some states also consider unclaimed gift cards and gift certificates as property that the state can claim under escheat rights.

Can an Heir Reclaim Escheated Property?

Each state has its own regulations governing escheat rights. In some cases, the property may reclaim escheated funds. However, these states may have a statute of limitations for taking this step.

What Is the Escheatment Process?

The majority of states have set procedures for the unclaimed property being turned over to the state after a certain time.

When an individual does without a will, their estate assets are considered intestate and must go through probate. This legal process involves researching potential heirs, including spouses, siblings, and other relatives. If the probate court cannot find heirs for the unclaimed assets, it will grant escheat rights to the state.

Escheatment can also happen if the court determines that the only rightful heirs are incompetent to manage the inheritance.

What Are Escheatment Laws by State?

Each state requires financial institutions and brokerage firms to show due diligence in locating the owner of an abandoned account. Beyond that, escheatment regulations and timeframes vary from state to state.

The following table lists escheatment laws by state for bank accounts, checks or drafts, and wages or salaries.

State Bank Account Checks/Drafts
Alabama 3 years* 1 year
Alaska 5 years 5 years
Arizona 3 years 3 years
Arkansas 3 years 3 years
California 3 years 3 years
Colorado 5 years 5 years*
Connecticut 3 years 3 years*
Delaware 5 years 5 years
District of Columbia 3 years* 3 years
Florida 5 years 5 years
Georgia 5 years 5 years
Hawaii 5 years 5 years
Idaho 5 years 5 years
Illinois 5 years 5 years
Indiana 3 years 3 years
Iowa 3 years 3 years
Kansas 5 years 2 years
Kentucky 3 years 3 years
Louisiana 5 years 5 years
Maine 3 years 3 years
Maryland 3 years 3 years
Massachusetts 3 years 3 years
Michigan 3 years 3 years
Minnesota 3 years 3 years
Mississippi 5 years 5 years
Missouri 5 years 5 years
Montana 5 years 5 years
Nebraska 5 years 5 years
Nevada 3 years 3 years
New Hampshire 5 years 5 years
New Jersey 3 years 3 years
New Mexico 5 years 5 years
New York 3 years 3 years
North Carolina 5 years 7 years/5 years*
North Dakota 5 years 2 years*
Ohio 5 years 5 years
Oklahoma 5 years 5 years
Oregon 3 years 3 years
Pennsylvania 3 years 3 years
Rhode Island 3 years* 3 years
South Carolina 5 years 5 years
South Dakota 3 years 3 years
Tennessee 5 years 5 years
Texas 5 years 3 years
Utah 3 years 3 years
Vermont 3 years 3 years
Virginia 5 years 5 years
Washington 3 years 3 years
West Virginia 5 years* 5 years
Wisconsin 5 years 5 years
Wyoming 5 years 5 years

*more in-depth state rules exist

A statute of limitations typically does not apply to dormant accounts. In other words, the rightful owner or beneficiary may be able to claim them from the state at any time.

The National Association of Unclaimed Property Administrators (NAUPA) is an organization that helps rightful owners claim unclaimed property. Individuals can conduct a free online search for unclaimed property through the NAUPA website.

Helpful Resurces:

Investopedia - Escheat Definition

Title Research - What is escheatment?

Patriot Software - What Is Escheatment?

NCSL - Abandoned or Unclaimed Property and Escheatment Statutes

Investopedia - How Can You Reclaim Unclaimed Property?

National Association of Unclaimed Property Administrators - Home