Escheat
Candlefocus EditorEscheat is a legal concept that provides state governments with the legal right to take ownership and control of unclaimed property or assets. This right is commonly referred to as “escheat rights.” The legal process that oversees this transfer is known as escheatment, and differs from state to state, though they often involve probate or other types of court proceedings.
The main purpose of escheat laws is to protect a state’s residents. By reclaiming unclaimed assets, the state can more effectively disburse them to its citizens as funds or benefits, rather than just allowing it to sit unclaimed in accounts. Due to this, states typically have time limits associated with unclaimed property, which is usually within a few years of the date of death.
Escheat laws have been around for centuries. Initially, the purpose of such laws was for the state to claim any unclaimed property or assets in order to prevent individuals from leaving the state with such assets. During feudal times, only certain individuals were allowed to inherit such assets and as such, the original escheat laws allowed the state to issue such inheritance rights.
Today, most states in the United States have standard procedures in place for automatically transferring dormant accounts after a certain period of time. In these cases, the state may take possession of the unclaimed property and may either use it as a source of revenue or distribute it to current or former residents.
In some cases, a state may also use the asset proceeds to establish or fund endowments and trusts, or to support state or local governments. Furthermore, some states may also require that a person claiming such assets to provide the state with valid identification prior to receiving the claim.
In short, escheat is a legal process by which a state government reclaims unclaimed property or assets on behalf of its residents. This can be useful for a variety of reasons and can help both state and local governments maximize resources. Moreover, it can also help current and former residents of a state receive the full benefits of their assets, particularly if it had been dormant for a certain period of time.