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.