The term escheat refers to the transfer of title to the state of a person’s property when the owner of the property dies without a valid Will, called intestate, and is not survived by any heirs legally entitled to take the property without a valid will. An applicable heir may be a spouse, descendants, parents, grandparents, descendants of parents, children or grandchildren of grandparents, or great-grandchildren of grandparents, or as otherwise set forth by each state’s escheating laws.
Real and personal property, including bank accounts and stock shares, may be subject to escheat. Although states may vary about what types of personal property may be escheated, some common items include abandoned bank accounts, utility company deposits, unpaid wages, unclaimed property from the estate of a deceased relative, or unclaimed lottery winnings. Each State has laws about the length of time a property needs to remain inactive before it is deemed abandoned.
The state is required to notify the public that such property exists to give any potential heirs an opportunity to show that the property might rightfully be set aside to them. The state is able to take possession of the property and hold it for a period of time, giving the public an opportunity to bring any claims of ownership. The state is not required to escheat all unclaimed property.
The best way to keep your property from escheating to the state is to speak with your estate planning professional today.