What is escheatment?

Escheatment refers to the legal process by which unclaimed funds or property are transferred to state authorities after a certain period during which the rightful owner cannot be located. This process ensures that unclaimed or abandoned assets are managed responsibly and ultimately returned to the public treasury or used for public purposes.

When individuals fail to claim their money, whether it's from forgotten bank accounts, uncashed checks, or dormant accounts, these funds are considered unclaimed. States have laws that dictate the timeframe and procedures for escheatment, emphasizing the importance of tracking and reporting such unclaimed assets.

Understanding escheatment is vital for companies and financial institutions, as they have a legal responsibility to report and remit unclaimed properties to the state. This process not only ensures compliance with state laws but also protects consumers by attempting to reunite them with their lost funds.