What "escheat" means in practice (ownership vs. state custody)
Escheat is the legal process by which private property reverts to the state when no owner, heir, or claimant can be identified or located. Contrary to popular belief, it doesn't always mean permanent forfeiture.
In most unclaimed-property contexts, the state assumes custody rather than outright ownership. The original owner or rightful heirs can typically file a claim to recover those assets, though timelines and procedures vary by jurisdiction.
For real property, escheat traditionally follows probate or intestacy proceedings that fail to locate lawful heirs. In those cases, title does transfer to the state, though reclaim options may still exist under specific circumstances.
Two common scenarios: heirless property vs. unclaimed property escheatment
Escheat unfolds in two main ways, each with distinct triggers and outcomes.
The first scenario involves heirless real property. When someone dies without a will and no heirs can be identified through intestate succession, the property may escheat to the state after the probate court exhausts all efforts to locate relatives.
The second—and far more common—scenario is unclaimed financial property. Dormant bank accounts, forgotten brokerage holdings, uncashed dividend checks, and unclaimed insurance proceeds all fall into this category. After a statutory dormancy period and required due-diligence steps, the holder (bank, broker, insurer) reports and remits the property to the state's unclaimed-property division.
How the escheatment process typically works (timeline and notices)
Escheatment doesn't happen overnight. States impose multi-year dormancy periods and require custodians to make good-faith attempts to reach the owner before transferring assets.
Once an account or property meets the dormancy threshold, the holder initiates due diligence and sends notices to the last known address. If those notices are returned or go unanswered, the holder reports the property to the state and remits the funds or securities.
Dormancy periods, due diligence mailings, and reporting to the state
Dormancy periods range from one to five years, depending on the property type and state. Bank accounts and stocks commonly trigger at three to five years of inactivity, while payroll checks or utility refunds may escheat after just one year.
Before reporting, custodians typically send at least one written notice. Returned mail or lack of response moves the property into the reporting pipeline. Holders then file periodic reports—often annually—with the state treasurer or comptroller, transferring both the asset and associated owner data.
States publish these reports, making the data searchable through official unclaimed-property databases.
What types of property can escheat (and what's most common)
Nearly any intangible personal property can escheat if it goes unclaimed long enough. The most frequent categories include bank accounts, stocks, bonds, mutual funds, insurance proceeds, dividends, uncashed checks, and safe-deposit box contents.
Real property can also escheat, though it's far less common and typically requires a complete failure to identify heirs or valid claimants through probate.
Investor-focused examples: brokerage accounts, dividends, DRIPs, and forgotten checks
For investors, the highest-risk assets are those that generate periodic statements or payments but receive no response. Brokerage accounts with no login activity, dividend checks sent to outdated addresses, and dividend reinvestment plans (DRIPs) held in inactive accounts are all vulnerable.
Merger proceeds, class-action settlements, and stale-dated checks from portfolio distributions also frequently end up in state custody. Even small balances add up—states currently hold tens of billions in unclaimed property nationwide.
Real estate implications: when title can escheat and what happens next
Escheat of real property occurs when the owner dies intestate and the probate court cannot locate any heirs entitled under state intestacy statutes. After exhausting statutory notice and search requirements, the court may declare the property escheated.
Title then passes to the state, which may sell, hold, or repurpose the land. Some jurisdictions add escheated parcels to public land inventories; others auction them. Procedures and disposition vary widely.
Even after title escheats, some states allow late-surfacing heirs to file claims within a limited window, often with requirements to prove heirship and reimburse the state for proceeds already received or costs incurred.
How to find and claim escheated/unclaimed property (step-by-step)
Start by searching your state's official unclaimed-property database, usually hosted by the state treasurer, comptroller, or department of revenue. Most states also participate in the National Association of Unclaimed Property Administrators (NAUPA) multi-state search portal at unclaimed.org.
Search under your current name, prior names (including maiden names), past addresses, and any business names if you've owned a company. Repeat the search for deceased family members if you may be an heir.
When you find a match, initiate a claim directly through the state's website or by mail. You'll need to provide identification—typically a driver's license or state ID, proof of Social Security number, and documentation tying you to the property (old account statements, utility bills at the listed address, or employer records).
For claims as an heir or estate representative, you'll also need a death certificate and probate documentation or affidavit of heirship, depending on state requirements and claim size.
Processing times range from a few weeks for simple claims to several months for complex estate or securities holdings. Most states do not charge a fee to file or recover your property.
How to prevent escheatment (investor and property-owner checklist)
Investors can avoid escheatment by maintaining regular account activity. Log in to online accounts at least once per dormancy period, update your mailing address and email promptly, and cash checks within a reasonable window.
Designate or update beneficiaries on brokerage accounts, retirement plans, and bank accounts. Beneficiary designations transfer assets outside probate and reduce escheat risk.
Consolidate old accounts where practical. Scattered holdings at multiple institutions increase the chance one will go dormant unnoticed.
For real property, maintain a current will or trust and keep estate-planning documents up to date. Clear title records and updated contact information with county assessors and mortgage servicers help ensure you or your heirs receive official notices.
Finally, maintain organized records of account numbers, institutions, and closing documents. Share a summary with a trusted family member or executor so assets aren't lost if you become incapacitated or pass away.
FAQ
Does "escheat" mean the state permanently owns my property?
Not always. For many unclaimed-property programs, the state takes custody after a dormancy period and owners/heirs can typically reclaim later (rules and any time limits vary by state).
What triggers escheatment for accounts and cash-like assets?
Most often: long inactivity on an account, returned/undeliverable mail, uncashed checks (wages, refunds), forgotten deposits, or a deceased owner's assets with no reachable or verified heirs/beneficiaries—after required notices and statutory timelines.
Can real estate escheat?
Yes, but it's less common than financial-property escheatment. Real property typically escheats only after probate/intestacy processes fail to identify lawful heirs or a valid owner—then title may pass to the state under state law.
How do I search for unclaimed property tied to me or a family member?
Start with your state's official unclaimed property website and multi-state search tools (e.g., NAUPA/unclaimed.org). Search by current and prior names, prior addresses, and business names if relevant.
What documents do I usually need to file a claim?
Common requirements include government ID, proof of Social Security number (where requested), proof of current/prior address, and proof of ownership. For heirs/executors, expect death certificate plus probate/estate documentation or other heirship proof per state rules.
How long does an unclaimed property claim take to process?
Timelines vary by state and claim complexity. Straightforward claims may be processed in weeks; estate or securities claims can take longer due to additional verification.
Do I have to pay a third party to recover unclaimed property?
Usually no. Filing through official state channels is typically free. Be cautious with "asset recovery" solicitations and verify you're using an official .gov site or the state's authorized portal.
How can investors and property owners reduce the risk of escheatment?
Keep accounts active, update addresses and contact info, name/refresh beneficiaries, consolidate old accounts, track employer plan rollovers, retain closing/escrow records, and maintain an estate plan so assets transfer cleanly.
