escheatment

Escheatment is the legal process by which unclaimed or abandoned property reverts to the government after a defined period of inactivity. It is a feature of unclaimed property laws found in many jurisdictions and serves to prevent property from remaining ownerless while safeguarding assets that vest with the state.

The scope of escheatment typically includes a wide range of assets payable to individuals, such as bank accounts, uncashed payroll or vendor checks, wages, stocks and bonds, insurance proceeds, and contents of safe-deposit boxes. In practice, escheatment mostly involves intangible assets or monetary instruments rather than real property.

Dormancy periods—also called abandonment or dormancy periods—vary by asset type and jurisdiction. They usually range from one to three years for wages or small checks and from three to five years for bank accounts or securities. After the dormancy period expires, ownership rights may lapse and the asset is reported to the state, which then takes custody of the item or funds as unclaimed property.

Owner claims and recovery: A rightful owner or their successor can typically file a claim with the state unclaimed property office, providing identification and proof of ownership and last known address. Claims procedures vary, but many jurisdictions allow online submissions and require verification. Some places impose time limits for filing after escheatment, while others hold funds indefinitely.

Administration and purpose: Unclaimed property programs are usually administered by a state or provincial treasurer, comptroller, or equivalent agency. The purpose of escheatment is to safeguard property and eventually return it to its rightful owner; funds held may accrue interest and are used for public purposes in some jurisdictions.