What Is Escheatment?

Escheatment Explained in Less Than 5 Minutes

Definition

Escheatment occurs when money in a deposit account appears abandoned for a specified time period, and the financial institution that holds the dormant account must turn it over to the state. The original owner can still access the money from the state, so long as they can make a proper claim for it.

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Definition and Example of Escheatment

When money lies dormant in a deposit account or appears to be abandoned, the bank or other organizations with which the money was deposited aren’t necessarily allowed to just keep that money for their own use. After a period of time, they’re required to turn it over to the state. This is called "escheatment." Once it's turned over to the state for safekeeping, the owner of the money can still access it by making a proper claim for it.

It’s not only money in deposit accounts that will be escheated. If you forget to cash a check, that money can be escheated. Likewise, if you don’t claim your wages, that money can also be escheated.

How Escheatment Works

When personal property goes unclaimed, and the current bank or firm that holds the funds has been unable to locate the owner, the state can legally claim it through escheatment. The state must follow certain procedures to document the escheatment and must allow an opportunity for the original owner to come forward.

Here are some of the types of property that can go unclaimed and will be escheated: 

  • Checking accounts
  • Savings accounts
  • Payroll checks and commission checks
  • 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

Note

Federal tax refunds won't be escheated to the state. Be mindful also that you only have three years to claim a federal tax refund.

When Are the Funds Turned Over to the State?

The amount of time that passes before the account will be turned over depends on the state. Each state has different periods of time and other requirements for escheatment. The amount of time also depends on the type of money or account that’s being escheated. Bank accounts, checks, and wages may be subject to different periods.

It's important to note that laws may change, and that the authoritative source of escheatment rules lies with each state. However, by way of example, the chart below shows the state and the amount of time after which the bank or another payor will turn the money over to the state.


State

Bank Account

Checks/Drafts

Wages/Salaries

Alabama

3 years*

3 years

1 year

Alaska

5 years

5 years

1 year

Arizona

3 years

3 years

1 year

Arkansas

3 years

3 years

1 year

California

3 years

3 years

1 year

Colorado

5 years

5 years*

1 year

Connecticut

3 years

3 years*

1 year

Delaware

5 years

5 years

5 years

D.C.

3 years*

3 years

1 year

Florida

5 years

5 years

1 year

Georgia

5 years

5 years

1 year

Hawaii

5 years

5 years

1 year

Idaho

5 years

5 years

1 year

Illinois

3 years

3 years

1 year

Indiana

3 years

3 years

1 year

Iowa

3 years

3 years

1 year

Kansas

5 years

5 years

1 year

Kentucky

3 years

3 years

1 year

Louisiana

5 years

5 years

1 year

Maine

3 years

3 years

1 year

Maryland

3 years

3 years

3 years

Massachusetts

3 years

3 years

3 years

Michigan

3 years

3 years

1 year

Minnesota

3 years

3 years

1 year

Mississippi

5 years

5 years

5 years

Missouri

5 years

5 years

3 years

Montana

5 years

5 years

1 year

Nebraska

5 years

5 years

1 year

Nevada

3 years

3 years

1 year

New Hampshire

5 years

5 years

1 year

New Jersey

3 years

3 years

1 year

New Mexico

5 years

5 years

1 year

New York

3 years

3 years

1 year

North Carolina

5 years

5 or 7 years*

1 year

North Dakota

5 years

2 years

2 years

Ohio

5 years

5 years

1 year

Oklahoma

5 years

5 years

1 year

Oregon

3 years

3 years

3 years

Pennsylvania

3 years

3 years

2 years

Rhode Island

3 years

3 years

1 year

South Carolina

5 years

5 years

1 year

South Dakota

3 years

3 years

1 year

Tennessee

3 years

3 years

1 year

Texas

3 years

3 years

1 year

Utah

3 years

3 years

1 year

Vermont

3 years

3 years

1 year

Virginia

5 years

5 years

1 year

Washington

3 years

3 years

1 year

West Virginia

5 or 7 years*

5 years

1 year

Wisconsin

5 years

5 years

1 year

Wyoming

5 years

5 years

1 year


*Be sure to consult your specific state laws for additional requirements.

Possible Fees Charged

Banks often charge fees before they turn the money over to the state. Some charge monthly service fees, which you’re probably familiar with on your checking account, although many banks charge a smaller fee once they determine that the account is dormant or inactive, and if the balance is small.

Note

Some banks charge a special escheat fee before the money goes to the state.

Requirements for Claiming Escheated Funds

Start by searching on a public database like Unclaimed.org or MissingMoney.com. These sites can link you to the unclaimed-funds sites for each state, and from there you can search for funds that you might be able to claim. You can also run a search for "unclaimed property in [your state]."

If your property is turned over to the state, the state will have a claims process you must undertake to verify that you’re entitled to the money before it will be released to you. Some require special forms, some allow you to claim online, and some require special documents or identification. 

Key Takeaways

  • Escheatment is the process by which unclaimed funds in accounts with a bank or other financial institution are turned over to the state.
  • The amount of time before funds are considered abandoned varies by the type of property and the state it is in, but it generally ranges between one and five years.
  • To reclaim your escheated funds, you will need to fill out the proper forms and follow procedures set by the specific state.
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Sources
The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. U.S. Securities and Exchange Commission. "Escheatment by Financial Institutions." Accessed Nov. 9, 2021.

  2. National Association of Unclaimed Property Administrators. "What Is Unclaimed Property?" Accessed Nov. 9, 2021.

  3. USA.gov. "Unclaimed Money From the Government." Accessed Nov. 9, 2021.

  4. Patriot. "What Is Escheatment?" Accessed Nov. 9, 2021.

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