The term “escheatment” refers to the situation in which a deposit account’s money appears to have been abandoned for a predetermined amount of time and the financial institution that holds the account is required to turn it over to the state. As long as they can legitimately claim the state funds, the original owner can still access them.
The bank or other organization with which the money was deposited is not necessarily permitted to just keep that money for their use when it lies dormant in a deposit account or appears to be abandoned. They are required to hand it over to the state after a certain period.
The term for this is “escheatment.” The owner of the money still has access to it after it is given to the state for safekeeping by filing a valid claim for it.
Escheat will not only affect money in deposit accounts. Money can be stolen if you forget to cash a check. Also, if you don’t file a wage claim, your wages could be taken away.
How Escheatment Works: The state can legally claim personal property through escheatment when the current bank or company that holds the funds has been unable to locate the owner and the property has gone unclaimed. The state must follow certain steps to record the escheatment and give the original owner a chance to come forward.1 Some examples of property that can go unclaimed and be escheated are:
Vendor credits Utility deposits Stocks, bonds, dividends, mutual fund, and brokerage accounts CDs IRAs Life insurance proceeds Annuity contracts Oil and gas or other mineral royalties State tax refunds Pension benefits When Are the Funds Turned Over to the State? Savings accounts Payroll checks and commission checks
The state determines how long it takes for the account to be turned over.
Escheatment is subject to distinct time frames and other conditions in each state. The kind of money or account that is being stolen also affects how long it takes. Ledgers, checks, and wages might be dependent upon various periods.
It’s important to remember that laws can change and that each state sets the rules for escheatment. However, as an illustration, the state and the time frame within which the bank or another payor will hand over the money to the state are depicted in the chart below.
Possible Charges Before giving money to the state, banks frequently charge fees. Although many banks charge a smaller fee once they determine that the account is dormant or inactive and if the balance is small, some charge monthly service fees, which you probably already know about on your checking account.
Requirements for Claiming Escheated Funds To begin, search a public database like MissingMoney.com or Unclaimed.org. These websites can direct you to each state’s unclaimed funds websites, where you can look for funds you might be eligible to claim. You can likewise run a quest for “unclaimed property in [your state].”
If the state takes possession of your property, you will have to go through a claims process to make sure you are entitled to the money before it can be given to you. Some let you make a claim online, others require special documents or identification, and some require special forms.
