Escheatment: What Is It?

In less than 5 minutes, explain escheatment

Escheatment: What Is It?

Escheatment occurs when funds in a deposit account appear to have been abandoned for a predetermined amount of time, at which point the financial institution holding the dormant account is required to turn the funds over to the state. As long as they can establish a valid claim for it, the original owner can still access the money from the state.

Main Points

  • Unclaimed funds in accounts with a bank or other financial institution are transferred to the state through the escheatment process.
  • Depending on the type of property and the state it is in, it may take between one and five years before funds are deemed abandoned.
  • You must complete the appropriate paperwork and adhere to the state-specific rules in order to recover your escheated funds.

Escheatment Definition and Example

The bank or other organizations with which the money was deposited aren’t always allowed to just keep that money for their own use when it sits idle in a deposit account or seems to have been abandoned. They must turn it over to the state after a certain amount of time. “Escheatment” is the term for this. If the owner of the money turns it over to the state for safekeeping, they can still get access to it by filing a proper claim.

Escheated funds include funds not only in deposit accounts. A check’s funds may become escheated if you fail to cash them. A similar thing can happen to your wages if you fail to claim them.

The Process of Escheatment

Escheatment allows the state to legally take ownership of unclaimed personal property when the bank or company holding the funds has been unable to contact the owner. The state must follow specific procedures to record the escheatment and must give the original owner a chance to claim their property.

Here are some examples of the kinds of property that might not be claimed and end up being escheated:

  • Accounts for checking.
  • Aaving escrows.
  • Payroll and commission checks.
  • Aendors’ credits.
  • Aeter deposits.
  • Mutual funds, brokerage accounts, dividends, stocks, and bonds.
  • CDs.
  • IRAs.
  • Death benefit payments.
  • Annuity agreements.
  • Royalties from minerals like oil and gas.
  • Return of state taxes.
  • Pension advantages.

Refunds of federal taxes won’t be escheated to the state. Also keep in mind that you only have three years to file a federal tax refund claim.

When Will the State Receive the Money?

Depending on the state, a certain amount of time may pass before the account is transferred. The escheatment requirements and time frames vary from state to state. The type of money or account that is being escheated will also affect how long it takes. Paychecks, bank accounts, and wage periods are all potentially variable.

Remember that laws can change and that each state’s escheatment laws are the final authority on the subject.

Possible Fees

Before giving the money to the government, banks frequently impose fees. Some charge monthly service fees for checking accounts, which you’re probably already familiar with. However, many banks impose a lower fee if they determine that the account is inactive or dormant and if the balance is modest.

Prior to the funds going to the state, some banks impose a special escheat fee.

Conditions for Reclaiming Escrow Funds

Start your search on a public database, such as or These websites can connect you to the state-specific unclaimed-funds websites, where you can start looking for money you might be able to get back. Searching for “unclaimed property in [your state]” is another option.”

If your property is turned over to the state, the state will require you to go through a claims process to demonstrate your eligibility before releasing any funds to you. Some require special forms, some let you submit your claim online, and some demand unique identification or documents.

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