We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.
Finance

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

What is an Escheatment?

Mary McMahon
By
Updated: May 17, 2024
Views: 3,001
Share

Escheatment is a procedure in which property which appears to be abandoned reverts to the ownership of the government. The government enters the property into its bookkeeping, and may dispose of it as it pleases. If a claimant to the property later appears and the claim is legitimate, the government provides compensation in accordance with the amount entered at the time of the escheatment.

This process has its roots in English common law, and it started as a way to prevent property from entering a state of legal limbo. If no clear ownership could be established because someone died without a will or because no clear heir could be identified, the property could revert to the ownership of the government. Otherwise, such property would have existed in a state of abandonment, because it could not be transferred or sold. Once the government took control, it could opt to utilize the property or to sell it.

Today, escheatment most commonly occurs when someone dies without a will or when someone appears to neglect a financial account, safe deposit box, or brokerage account. In cases where people die without a will, if family members can establish themselves as heirs, ownership of the person's property reverts to these heirs. If no heirs can be identified, the government receives the property. In situations like abandonment of accounts, the administrator of the account must generally demonstrate that there has been no activity for a set period of time, such as five years, before turning it over to the government in escheatment proceedings.

There are situations in which property with a legitimate owner becomes the property of the government through the escheatment process. There is a requirement to exercise due diligence to find the rightful owner, but sometimes even a thorough search doesn't turn anyone up at the time that the ownership of the property becomes an issue. People who believe that property may have been taken from them by escheatment can file a claim, providing documentation which indicates that the property rightfully belongs to them.

Numerous governments maintain databases which include all available information about property which has reverted to their ownership. People can search the databases for records in their name to see if any records come up. Likewise, these records can be searched if someone is the heir to someone who has died and there is a concern that property belonging to the decedent ended up with the government. For example, if someone died in California but had bank accounts in another state which heirs were not aware of at the time of the death, searching escheatment records might show these accounts and provide information about how to make a claim.

Share
WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Mary McMahon
By Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a WiseGeek researcher and writer. Mary has a liberal arts degree from Goddard College and spends her free time reading, cooking, and exploring the great outdoors.

Editors' Picks

Discussion Comments
Mary McMahon
Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a...

Learn more
Share
https://www.wisegeek.net/what-is-an-escheatment.htm
Copy this link
WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.

WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.