Escheat Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Escheat, written in plain English, along with examples of how it is used.
What is Escheat?
n. from old French eschete, which meant “that which falls to one,” 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.
History and Meaning of Escheat
Escheat is a legal term from Old French meaning "that which falls to one." It refers to the reversion of property to the state when the property owner dies without leaving a valid will and has no legal heirs. The property is considered to have "escheated" or reverted to the state, which becomes the owner of the property. Escheat has existed since medieval times when legal systems were based on feudal law. The concept stems from the idea that all property is ultimately owned by the state.
Under modern law, escheat is based on the principle of ensuring that property is not left in limbo without an owner. The state takes possession of the property and can sell it or use it for public purposes. Most states have specific statutes outlining the process for escheat of assets, which typically includes attempts to locate rightful heirs before the state takes possession.
Examples of Escheat
- In California, if someone dies without a will and without any known heirs, their property may escheat to the state after three years.
- A man dies without a will, leaving behind a bank account with no designated beneficiary. After a certain amount of time, the money in the account may escheat to the state.
- A company goes out of business and is dissolved, and its assets must be distributed according to state law. Any remaining assets may escheat to the state if there is no legal owner to claim them.
Legal Terms Similar to Escheat
- Abandoned property - property that remains unclaimed by its owner for a specified period of time may be abandoned and transferred to the state.
- Bona vacantia - a Latin term meaning "vacant goods." Similar to escheat, it refers to property or assets that have no legal owner and revert to the state.
- Unclaimed property - property that is not claimed by its owner, such as abandoned bank accounts or lost inheritances, may escheat to the state after a certain period of time.