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The power of a state to acquire title to property for which there is no owner.

The most common reason that an escheat takes place is that an individual dies intestate, meaning without a valid will indicating who is to inherit his or her property, and without relatives who are legally entitled to inherit in the absence of a will. A state legislature has the authority to enact an escheat statute.

In feudal England, escheat was a privilege exclusively given to the king. The policy of inheritance was to preserve the wealth of noble families by permitting one individual to inherit an entire estate. There was no writing of wills that would leave property to several heirs because that would have the effect of breaking up the estate. In addition, the law established a hierarchy of heirs who stood in line to inherit the estate. If there was no living person of a designated class to inherit, the king took the property by escheat.

Historically, reasons existed for escheat apart from the absence of heirs to inherit a decedent's property. When corporations were subject to strict regulation, it was unlawful for a corporation to own property in any way not permitted by its state-granted charter. Any property beyond that needed by the corporation for the operation of its business, or in excess of the amount designated in its charter, or held for a period of time beyond that which was permitted, was subject to escheat.

Certain states mandated escheat of property belonging to religious societies that either promoted Polygamy or neglected to incorporate as required by law. Additionally, where public lands were provided for settlers, statutes frequently made provisions for escheat when one individual took possession of more than the permitted acreage or did not properly cultivate the homestead.


Escheat is distinguishable from Forfeiture even though both terms refer to a relinquishment of property. Forfeiture can be applied to any type of property interest, including possession, the right to inherit, or the right of reversion. In addition, forfeiture often is used as a penalty against an individual who has an interest in property, for an illegal act. An escheat takes place due to the lack of any person with a valid interest in the property, and is not usually linked to any illegality or wrongdoing.

Succession is the passing of a decedent's property to his or her heirs. Escheat is not treated in law like succession; the two concepts are completely separate.

Property Subject to Escheat

Ordinarily, the property subject to escheat is all the property within the state belonging to the original owner upon his or her death. Although initially the doctrine was applicable solely to real property, it presently extends to Personal Property, including such intangibles as bank accounts and shares of stock. Certain other types of property can be the subject of escheat for lack of a known owner. The determination is contingent upon state law.

Unclaimed or abandoned property escheats to the state under some statutes. However, the state cannot merely declare property abandoned and appropriate it. Such laws must function within constitutional limits by observing the requirements imposed by due process. The state is required to adopt a routine procedure for notifying the public and must provide potential claimants an opportunity to argue that the property might belong to them. Without declaring that certain abandoned property has been escheated, the state may lawfully possess the property and hold it for a period of time so that claims can be asserted. A state is not mandated to take over unclaimed property but may choose to exercise the power to escheat only when the value of the property does not exceed the expense of legal proceedings.

Items subject to escheat under various statutes include abandoned bank accounts, deposits left with utility companies, stock dividends whose owners cannot be found; unpaid wages; unclaimed legacies from the estate of a deceased relative; insurance money to unknown beneficiaries; and unclaimed money retained by employers or public officials.

Certain statutes specify that the property of charitable or religious institutions escheats upon dissolution if its donors have not retained the right to recover it when it is no longer used for religious or charitable objectives.


Escheat statutes vary by state, but all prescribe a procedure for location of the rightful owner. In some states title to certain types of property automatically passes to the state when it escheats for lack of a proper claimant. In other states, a required period of time must elapse prior to the commencement of escheat proceedings. This does not bar a claimant from stating his or her claim before completion of the escheat proceedings. Some laws require claimants to assert their rights within a period of time or forfeit them. Often, states mandate that individuals administering estates notify the state government of the existence of property that might be subject to escheat.

The primary burden of proving that there is no proper individual entitled to own the property in question rests with the state, and the general rules regarding the admissibility of evidence are applicable. Rules of presumption, such as the common-law presumption of death after a seven-year disappearance, can be used to support the case of the state. After the state has proved a legally sufficient case, any individual claiming a right to the property has an opportunity to go forward and argue against the evidence submitted by the state.

Some states offer money to informers who notify the state of property that might be subject to escheat. Informers might be required to provide evidence and pursue the case to a conclusion before they will be entitled to a fee. Other states provide compensation for an escheater, a person appointed by the court to manage the claim of the state for escheat. An escheater is entitled to be paid a reasonable amount even if he or she does not succeed in recovering the property for the state.

Further readings

Ramasastry, Anita. 2001. "State Escheat Statutes and Possible Treatment of Stored Value, Electronic Currency, and Other New Payment Mechanisms." Business Lawyer (November).

Woodards, Shantee. 2003. "Unclaimed Property Piles Up." Detroit News (September 13).

Andreoli, Anthony L., and J. Brooke Spotswood. 2002. Unclaimed Property: Laws, Compliance, and Enforcement. Chicago: CCH.

Haines, Martin L. 2000. "Change May Be in Offing for Rules Governing Abandoned Money." New Jersey Law Journal 162 (October 2): 23.

West's Encyclopedia of American Law, edition 2. Copyright 2008 The Gale Group, Inc. All rights reserved.


n. the forfeit of all property (including bank accounts) to the state treasury if it appears certain that there are no heirs, descendants or named beneficiaries to take the property upon the death of the last known owner.

Copyright © 1981-2005 by Gerald N. Hill and Kathleen T. Hill. All Right reserved.


in feudal law, the reversion to the immediate feudal superior where the owner of an estate in fee died without heirs. In England and Wales, the last vestiges of the law of escheat were abolished in 1925; now land that becomes ownerless on the death of its owner goes to the Crown as BONA VACANTIA. In the USA it is generally the case that land will escheat to the state or county if the owner dies intestate and no heirs are discoverable. See ULTIMUS HAERES.
Collins Dictionary of Law © W.J. Stewart, 2006

ESCHEAT, title to lands. According to the English law, escheat denotes an obstruction of the course of descent, and a consequent determination of the tenure, by some unforeseen contingency; in which case the land naturally results back, by a kind of reversion, to the original grantor, or lord of the fee.. 2 Bl. Com. 244.
     2. All escheats, under the English law, are declared to be strictly feudal, and to import the extinction of tenure. Wright on Ten. 115 to 117; 1 Wm. Bl. R. 123.
     3. But as the feudal tenures do not exist in this country, there are no private persons who succeed to the inheritance by escheat. The state steps in, in the place of the feudal lord, by virtue of its sovereignty, as the original and ultimate proprietor of all the lands within its jurisdiction. 4 Kent, Com. 420. It seems to be the universal rule of civilized society, that when the deceased owner has left no heirs, it should vest in the public, and be at the disposal of the government. Code, 10, 10, 1; Domat, Droit Pub. liv. 1, t. 6, s. 3, n. 1. Vide 10 Vin. Ab. 139; 1 Bro. Civ. Law, 250; 1 Swift's Dig. 156; 2 Tuck. Blacks. 244, 245, n.; 5 Binn. R. 375; 3 Dane's Ab. 140, sect. 24; Jones on Land Office Titles in Penna. 5, 6, 93. For the rules of the Roman Civil Law, see Code Justinian, book 10.

A Law Dictionary, Adapted to the Constitution and Laws of the United States. By John Bouvier. Published 1856.
References in periodicals archive ?
The Commission also acknowledged that UNC-Chapel Hill had changed how it used escheats. Because of generous funding from the State, the Trustees of UNC-Chapel Hill, in 1946, had ceased to draw upon the principal of escheats.
(5) Simply put, the transformation of unclaimed property into revenue first requires a state to "escheat," or take custody of property from a "holder," which is generally a corporation.
To analyze an escheat obligation or liability, one must examine the character of escheatable property, the identity of the parties, and the period of dormancy.
In an effort to avoid turning over property to the state, some businesses include contractual provisions that cause the loss of the owner's property rights prior to the rime the property would escheat. For example, a business may include a statement on a written instrument declaring that the owner's failure to negotiate an instrument within a certain period of time constitutes private escheat (i.e., the property reverts back to the holder).
The two most notable legislative trends over the past several years are (i) the increasing number of states that are exempting gift certificates, gift cards, and other retail payment and loyalty products from their escheat laws, and (ii) the very recent adoption by a number of states of a business-to-business (B2B) exemption.
(176) Also a consideration for Edward's policy concerning grants of escheats, forfeitures, and annuities, many of which had less than permanent terms.
has no heirs alive at A's death, the property will escheat to the state.
* If neither State B nor State C escheats unused gift card balances, then State A may have a basis for escheating any unclaimed balances.
"Escheat" refers to a jurisdiction taking possession of unclaimed property.
As noted, a state does not own the property that escheats to it; it merely holds it until the true owner can be found or comes forward to claim the property.
If the purchaser's home state is unknown, or if that state does not escheat gift cards, the state where the business is incorporated can enforce its escheatment rules.
That is--until the property was escheated. My desire to join