# Escheat: Meaning, Process, and Reclaiming Assets

![Escheat](https://www.investopedia.com/thmb/lgvgPYS4bOLcARqE7nyNrCIrCik=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/GettyImages-810803280-c52c231b44cf41e5841a92ac0cbc8be9.jpg)

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## What Is Escheat?

Escheat is when a government obtains ownership of unclaimed property or estate assets due to there being no identifiable heirs or beneficiaries. This happens when assets are left without a claim for a long period or someone passes away without a will or legal heirs. Each U.S. state has specific laws about this process, allowing unclaimed assets to potentially revert to a rightful owner if they emerge.

### Key Takeaways

*   Escheat allows the government to claim ownership of assets that remain unclaimed and without identified heirs.
*   Each U.S. state has its own laws that dictate the escheat process, including time frames for asset dormancy.
*   Assets that might be subject to escheat include bank accounts, securities, and real estate.
*   Escheated property can typically be reclaimed if a legal owner or heir comes forward within a set time limit.
*   The escheat process often begins after a specified period of inactivity, where efforts to contact the asset owner have failed.

## Delving Deeper Into Escheat: A Detailed Guide

Escheat is a government's right to property if it remains unclaimed for any reason after some period of time. Courts can grant escheat rights, or they can arise after a set time period. In the case of death with no will or [heirs](https://www.investopedia.com/terms/h/heir.asp), escheat rights may be granted to a state in a probate decision.

Every U.S. state has rules about escheat rights, and people can often reclaim escheated property. Some states set a [statute of limitations](https://www.investopedia.com/terms/s/statute-of-limitations.asp) that ends the right to reclaim property.

Escheatment is the process of transferring assets to the state. Escheat rights are often revocable; reclamation rights, however, can extend into perpetuity if no statute of limitations exists. This means that ownership of an estate or property/assets could revert to a lawful heir or owner should one turn up.

U.S. states also have processes and procedures for granting escheat rights when property has been unclaimed for a prolonged period. These processes vary by the type of asset, and usually by state.

Some of the financial accounts that can become escheated are:

*   Checking accounts
*   Brokerage accounts
*   Retirement accounts
*   Annuity contracts and accounts
*   Pension accounts
*   Savings accounts

## Navigating Escheat in Intestate Situations

If someone dies without a will, their estate is considered intestate. Probate courts usually handle final decisions for all deaths and wills. Intestate deaths also go through probate, which involves researching heirs who may be given property assets.

[Heirs eligible](https://estate.findlaw.com/probate/probate-without-a-will.html) to inherit assets intestate may include spouses, siblings, aunts, uncles, nieces, nephews, cousins, and potentially more distant relatives.

If no heirs are found, a probate judge grants escheat rights to the state. Escheat may also occur if a will or trust is deemed defective and legal heirs to an estate cannot be readily identified.

Generally, identifying heirs in most intestate deaths foregoes the need for escheatment. However, escheat can also occur if an individual's legal heirs are deemed incompetent to manage the inheritance and no other rightful heirs can be identified.

> **Important**
>
> If a rightful heir comes forward after escheat rights have been granted, property can be given to such heirs as outlined by law. Laws vary widely from state to state and may include a statute of limitations that can make asset ownership rights irrevocable.

## Managing Unclaimed Assets: How Escheatment Works

Escheat rights can be granted to the government for different types of assets. Assets may include real estate, bank deposits, and unclaimed [securities](https://www.investopedia.com/terms/s/security.asp) in accounts that have been dormant for a prolonged period.

Financial institutions and [brokerages](https://www.investor.gov/introduction-investing/investing-basics/glossary/escheatment-financial-institutions) keep records of inactivity, labeling inactive accounts dormant after a specified period. States usually require dormant accounts to be turned over to the government after a set time.

By law, financial institutions with [dormant accounts](https://www.investopedia.com/terms/d/dormant-account.asp) are usually required to make efforts—such as sending reminders and issuing notices—to locate the owners of these assets before finally transferring them to the state through escheatment.

Financial accounts automatically escheat after a certain amount of time.

Each state determines the time frame for granting escheat rights to the government and the process for doing so.

This table provides each U.S. state's escheatment timing for checking and savings accounts, bank checks, and wages (or salaries). Your state may have additional specifics pertaining to the data below, so be sure to review the latest information by visiting its official website or the National Association of Unclaimed Property Administrators.

## Reclaiming Your Escheated Assets: Considerations

Some states maintain online registries of unclaimed assets and dormant accounts, and register this information with the National Association of Unclaimed Property Administrators. You can find unclaimed property on its [website](https://unclaimed.org/search/).

However, state laws control reclamation and can set time limits on claims. Statutes of limitation usually help protect states that sell assets or spend funds for their own use, making these assets less recoverable.  

## What Does It Mean When an Account Is Escheated?

An account is in escheat when there are no identifiable heirs to an account, or no one claims it. The government then takes ownership. If a legal owner is identified, it can be reclaimed.

## What Does Escheat Mean in Law?

Escheat is the right of a government to take ownership of an account if no one claims it or has a claim to it after the owner's death.

## What Is an Escheat Example?

Imagine that you had assets in a brokerage account and that you didn't designate beneficiaries for the account, had no will, and had no relatives to whom these assets could pass according to the laws in your state. If you died and no one else claimed the account, ownership would be passed to the government.

## The Bottom Line

Escheatment allows governments to claim ownership of unclaimed financial assets or estate properties when there are no visible heirs or beneficiaries. While each state has specific procedures, property can often be reclaimed if a legitimate heir is discovered, provided it falls within the statute of limitations. Financial institutions regularly monitor dormant accounts and are required to notify owners before assets become escheated. To avoid escheatment, individuals should regularly update beneficiary information and stay informed about their state's laws on unclaimed property.  

> **Article Sources**
>
> 1.  National Association of Unclaimed Property Administrators. "[State-by-State Reporting Information](https://unclaimed.org/state-reporting/)."
>     
> 2.  National Association of Unclaimed Property Administrators. "[Search](https://unclaimed.org/search/)."